Can a 7% Annuity Outperform an 8% Annuity?

Can a 7% Annuity Outperform an 8% Annuity?

By Cathy DeWitt Dunn

Albert Einstein on Compound InterestIt may sound like a trick question, but the answer is simple.

An account earning 8% simple interest earns less over time than an account earning 7% compound interest. A popular hybrid annuity advertises an 8% minimum guaranteed simple interest rate, but the savvy consumer will recognize the better value lies in another strategy with a 7% compounded minimum interest rate.

In addition to 100% principal protection, this contract offers guaranteed lifetime income, an 8% immediate bonus, the ability to earn more than the 7% minimum guarantee, and income multipliers if you become unable to perform two of the basic daily living tasks.Simple Interest vs Compound Interest

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Cathy DeWitt Dunn
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DeWitt & Dunn, LLC
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Addison, TX 75001
(972) 473-4700

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