Mini Feature ANNUITIES REVISITED

By: Dr K C Gupta, YBB Personal Finance

CONTRARIAN INDICATORS

AAII Bull-Bear Spread -0.9% (below average)
CNN Fear & Greed Index 49 (neutral)
NYSE %Above 50-dMA 58.79% (positive)
SP500 %Above 50-dMA 68.60% (positive)

ICI Fund Allocations (Cumulative), 5/31/26
OEFs & ETFs: Stocks 63.26%, Hybrids 3.89%, Bonds 16.80%, M-Mkt 16.05%

INTEREST RATES

CME FedWatch

Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 7/29/26+ hold
FOMC 9/16/26+ hike

Treasury

T-Bills 3-mo yield 3.85%, 1-yr 4.06%; T-Notes 2-yr 4.21%, 5-yr 4.30%, 10-yr 4.56%; T-Bonds 30-yr 5.06% (normal yield-curve);
TIPS/Real yields 5-yr 2.02%, 10-yr 2.32%, 30-yr 2.86%
FRNs Index 3.771%

Bank Rates  www.depositaccounts.com/


Stable-Value (SV) Rates, 7/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.10%
TIAA MYGA 4.55% (3-yr), 4.70% (5-yr), 4.75% (7-yr)
TSP G Fund 4.500% (previous 4.500%)

India Fear & Greed MMI 65.02 (greed-high)
Weekly ETFs: INDA -0.52%, INDY -0.53%, EPI -0.70%, INDH -0.40% | SPY +1.37%

The data above are as of Sunday preceding the publication date.

BANKING – NRI A/C in INDIA

NRO – rupee savings a/c with checking; debit card; non-repatriable; Indian taxes; transfer rupees or dollars
NRE – rupee savings a/c with checking; debit card; repatriable; no Indian taxes; transfer dollar or hard currency only; NRE to NRO transfers only
FCNR – dollar a/c; deposit terms 1-5 yrs; repatriable; no Indian taxes; fund via NRE or wire transfer; temporarily higher interest 6-7% as RBI is covering banks’ foreign currency losses (FCNR issued from Jun 8 – Sep 30, 2026); FCNR transfers possible to NRO (not recommended) or NRE (recommended)
All major Indian banks: HDFC ICICI, PNB, SBI, etc.

EDUCATION

Collapsed ed-tech Byju’s global debt holders want bankruptcy settlement with 30% stake in one of Byju’s partially owned offline coaching chain Aakash Educational Services. Byju acquired Aakash in 2021 but now has only minority stake due to dilutions. Aakash has 300+ centers with teaching/ coaching 5,000 experts for test preparatory services for medical & engineering entrance exams & tutoring.

INDUSTRIALS

UAE International Holding Company (IHC) & Adani Enterprise Ltd (AEL) will launch an aluminum joint-venture (JV; 50-50) in Odisha, India with 2 phases. The integrated aluminum complex will include refinery, smelter, captive power plant & ‌downstream ⁠aluminum manufacturing. Odisha has large bauxite reserves that are used to produce ⁠aluminum; the state accounts for 54% of Indian aluminum output. Adani & IHC also have other projects (renewable energy, smart grid) in India.

IT/TECH

A consortium of companies from US (Microsoft), Singapore (Lightstorm, ASEA Cableship, Singapore Telecom), Japan (NEC) & India (Tata Communications) will build an undersea cable (2,237 miles) by 2029 between India & Southeast Asia (Singapore, Malaysia) to support datacenters for AI/IT. Lightstrom will also list in India in 2027.

SPECIAL TOPIC – ANNUITIES REVISITED

Annuities are complex & can be expensive. There are many types, so, which one to buy? Most people should focus on just 4 types of annuities.

ACCUMULATING ANNUITIES

If your 401k/403b plan offers accumulating annuities, also called stable-value (SV) funds, compare their monthly crediting rates with available money-market funds. Choose whichever clearly has higher yield. There may be restrictions on switching back & forth.

Multiyear guaranteed annuities (MYGAs) are for 3, 5, 7 years. There is tax deferral, but 10% penalty for withdrawals before 59.5 & early surrender charges typically apply. You can renew or change vendor through 1035 exchange. Decide if their extra rates are worth the headaches vs bank or brokered CDs.

LIFETIME INCOME

Single premium immediate annuities (SPIAs) are the most basic & cheapest lifetime income annuities. Compare their payouts & ratings. The decision to buy them is irrevocable (no refunds). Guaranteed income periods of 10, 15, 20 years may be available.

Deferred income annuities (DIAs), also called longevity insurance, are bought now but lifetime income streams are deferred until later ages. The money compounds with interest. These include QLACs from T-IRAs, 401k/403b (limit $210K in 2026); these $amounts escape T-IRA RMDs.

Free online quote services or independent agents can provide more choices than insurer agents. Choose insurers with acceptable combinations of rates/payouts & ratings. The state insurance departments provide guarantees (typical $250K – 500K per person, per insurer, in 2026), but their goals are workouts, not immediate settlements. So, avoid low-rated insurers.

If you have 25x annual expenses, then 12.5x can be used for lifetime income from SPIA or retirement plan option & the remaining 12.5x in conservative/ moderate portfolio for additional expenses, contingencies & inflation adjustments. This would be a modification of Bengen’s 4% SWR w/COLA rule that assumes all withdrawals from portfolio only.

For more information, see ybbpersonalfinance.proboards.com/