No. of Recommendations: 2

To explore payouts for annuities, I pulled some quotes from CANNEX on April 28, 2019. The annuitant was assumed to be a 65-year-old male buying a $100,000 annuity with annual payments that begin immediately, and no period-certain or cash-refund rider.

For the nominal annuity, there were 21 companies offering quotes from ranging from $6,113 to $6,643. This is a reasonably tight spread, where the best quote is only 5.73% larger than the smallest.2 Annuity payouts are also often quoted in percentage terms, which is the annual payment divided by the premium. The nominal annuity with the highest benefit ($6,643) would therefore have a payout of 6.643% ($6,643/$100,000=6.643%).

For the 2% fixed COLA annuity there were 14 companies offering quotes ranging from $4,866 to $5,168.

For the real annuity there was only one company offering a quote with a payout of $4,449. The same insurance company offering the real annuity also offered quotes at $6,244 for the nominal annuity and $5,030 for the 2% fixed COLA. Neither of these quotes was the best for the respective annuity type, but I mention it here and include the insurer in the analysis for reference purposes.


So the one insurance company offering a "real" inflation-adjusted annuity like Social Security is charging an extra 40% for the inflation protection.

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