Leslie Scism
speaker
504 appearances
9 recordings
1 series
first heard Sep 2017
last heard May 2023
Leslie Scism’s voice in public audio — every appearance, attributed to the second.
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Appearances
However, many bond funds have lost money in the last year as interest rates have been rising in the United States.
One of the contracts we mentioned in the story is from New York Life, and it is promising an annual rate of 3.2% a year on a three-year contract.
New York Life a year ago was paying 1.6% a year for three years.
And there are some five-year contracts that paid 4.25% a year.
So now one of the negatives of getting into fixed rate annuities right now is that some of the better rates are in three-year contracts.
A lot of people think interest rates are going to keep rising over the next couple years.
So while 3.2% sounds really good right now and is better than many other options where other options are going down,
In a year or so, if interest rates rise sharply, 3.2% might not sound as attractive as it sounds today.
People have been unsettled by how much the stock market has fallen in recent months, and especially older people who may have retired already or anticipate retirement are nervous about keeping as much money as they may have there because they're not going to have that many more years to work and bring in new money to invest for the future.
So they've got to worry about preserving the money they have.
So some of the older people have been moving some money out of stocks, so they need a new home for that money.
Annuities and bank certificates of deposit always have been available as options, but they haven't been very popular because in both those instances, you generally have to
commit your money for a set period of times.
So a lot of people in good times, they will avoid instruments that will have them tying up their money.
However, with stock and bond funds disappointing so many people, the annuities become relatively more attractive in this environment.
And people say, turn it, I've got to have my money somewhere.
I can let that money ride for three years, perhaps, and I'm comfortable committing it to an insurance company for three years.
I can do without tapping into that money.
So let me just move this portion of money there.
So that's one reason these annuities, which have always been an option, are being chosen.
Showing 81–100 of 504 · page 5 of 26
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