What will we be covering in this review?In this annuity review, we will be going over the following details regarding the Penn Mutual Single Premium Immediate Annuity (SPIA):
- Product Type
- Current Rates
- Realistic expectations
- How the annuity is best used
- How the annuity is more poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.You’re likely aware that people are living longer lives today. In fact, life expectancy in the U.S. today is nearly double what it was in the early 1900s. Because of that, retirees need to have a good solid strategy in place for securing an income that will last as long as they need it to. An annuity can solve that problem. In fact, annuities are designed to pay out a set amount of income for a certain period of time – including the remainder of your life, no matter how long that may be. But before you go out and purchase just any annuity, it is important to have a good understanding of how these financial vehicles work, and what you can anticipate as far as performance. In addition to that, these products will often come with an insane amount of “fine print”, so while you may think that the annuity will offer you certain benefits, you may actually need to incur various waiting periods, fees, charges, and/or other types of tradeoffs in order to get the benefits you had anticipated. That’s where Annuity Gator can help.
Annuity and Retirement Income Planning Information You Can TrustIf this is the first time you have visited our website, please allow us to officially welcome you here. Annuity Gator is made up of a team of annuity and financial experts who focus on providing in-depth information about annuities in general, as well as individual reviews for products, such as the Penn Mutual Single Premium Immediate Annuity. We’ve been providing annuity education for quite a few years now – far longer than our competitors have…although that hasn’t kept “copycat” websites from popping up all over the Internet. Many of these sites don’t necessarily want to educate you, though. Rather, they try to “lure” people in and provide their contact information by advertising annuity benefits like:
- High income payments
- Lowest annuity fees
- Guaranteed lifetime income
- 7% return!
Penn Mutual Single Premium Immediate Annuity (SPIA) at a Glance
|Single Premium Immediate Annuity
|Penn Mutual Insurance Company
|Type of Product
Opening Thoughts on the Penn Mutual SPIA AnnuityPenn Mutual was initially founded in 1847. As a mutual company, Penn Mutual is owned by its policyholders, as versus by stockholders. The company offers wealth enhancement and protection products, including term and permanent life insurance, and fixed, variable, and immediate annuities. The company is strong and stable financially, and it also has a good reputation for paying out claims to its policyholders. For that, Penn Mutual has earned very high ratings from all of the insurer rating agencies, including a(n):
- A+ (Superior) from A.M. Best
- A+ (Strong) from Standard & Poor’s
- Aa3 (Excellent) from Moody’s Investor Services
- AA- (Strong) from Kroll Bond Rating Agency
- 92 COMDEX Life Insurer Financial Profile
Before we get into the in-depth details, we have some legal disclosures to present…This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Penn Mutual Insurance Company has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and / or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners. Want to more about how annuities really work? Click here to receive our updated annuity report.
How Penn Mutual Describes the Single Premium Immediate AnnuityThe Single Premium Immediate Annuity, or SPIA, from Penn Mutual, is described as a solution for income needs and will continue paying out an income stream for as long as you need it to (or for a set period of time that you choose, such as ten or twenty years). This annuity offers a steady, and guaranteed, income stream with just one single premium contribution. No matter what happens in the stock market, the income from this SPIA will continue, and it is protected from loss. In addition, because your income will need to keep pace with future inflation, the single premium immediate annuity from Penn Mutual offers a cost of living adjustment, or COLA. This benefit is designed for increasing your income amount over time so that you can continue purchasing the items and services you need in retirement. On top of that, if you (the annuitant/income recipient) should pass away before receiving all of your premium back, the balance will be paid out to a named beneficiary. Alternatively, your beneficiary may choose to receive a series of payments from Penn Mutual over time.
How an Insurance or Financial Advisor Might “Pitch” the SPIA from Penn MutualIf you’re working with an insurance or financial advisor who has presented you with the Penn Mutual SPIA annuity, there are likely a few key items that he or she touched on in order to entice you to move forward and purchase it. First, this product can offer you a guarantee when it comes to income in retirement. This includes providing you with an income stream that will last throughout the remainder of your lifetime. So, if safety and guarantees are what you’re looking for, the advisor likely touched on these features. However, before you commit a large amount of your savings to this annuity, there are some things that you need to consider. For instance, once this annuity has been converted to income, the decision is non-reversible. This means that you will not be able to dig into your lump sum of cash – even if you have a financial emergency – once the income stream has started. With that in mind, then, it is imperative to keep in mind that the purchase of an annuity is a long term decision.
What About Fees on the Penn Mutual Single Premium Immediate AnnuityAs with other annuities, there are some tax- and fee-related areas to be aware of with the Penn Mutual Insurance Company’s Single Premium Immediate Annuity (SPIA). For instance, in this case, if you purchase an immediate annuity with after-tax dollars, each of your income payments that are made will consist of both a taxable income portion, and a return of premium portion (which is non-taxable). However, if you rolled money over into the annuity from a traditional IRA and/or an employer-sponsored retirement plan (such as a 401k plan) where the money that you contributed to the annuity has not yet been taxed, then you will owe taxes on 100% of the income distributions that you receive. This, in turn, can make a big difference in the amount of income you are actually able to “net” and spend – as well as make a difference in your overall retirement lifestyle.
The Annuity Gator’s End Take on the Penn Mutual Single Premium Immediate Annuity (SPIA)Where it works best: Although an immediate annuity might not be right for everyone, the Single Premium Immediate Annuity from Penn Mutual Insurance Company could be a good option for you if you are hoping to achieve:
- A reliable income stream right away (or one that starts within 12 months after purchasing the annuity)
- A place to move funds from an IRA, 401(k), or other type of retirement plan so that you can convert it from a lump sum of savings into a reliable, ongoing income stream
- A solution for the concern about running out of income in retirement
- Think that you may need some (or all) of your funds for other needs after your income stream has begun
- Do not plan to use the annuity for income