Current Annuity Rates in Pennsylvania
The following table shows rates for fixed annuities in the state of Pennsylvania. A fixed annuity earns a guaranteed interest rate for a set number of years, sometimes referred to as the annuity’s term. When the term elapses, the owner can cash out their annuity or convert it into a stream of income payments.
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| Product | Rate | Guarantee Period | Surrender Period | AM Best Rating |
|---|---|---|---|---|
Access SPDA |
3.25% | 4 Years | 4 Years | A- |
|
Access SPDA |
3.45% | 6 Years | 6 Years | A- |
|
Security Benefit Life Insurance Company Advanced Choice |
4.40% | 7 Years | 7 Years | A- |
|
Security Benefit Life Insurance Company Advanced Choice |
4.40% | 5 Years | 5 Years | A- |
|
Security Benefit Life Insurance Company Advanced Choice |
4.25% | 3 Years | 3 Years | A- |
Buying an Annuity in Pennsylvania
Pennsylvania is home to one of the oldest populations in the country, with 19.1% of the state’s residents aged 65 or older. The demographic most likely to purchase annuities — residents aged 45 to 64 with an annual household income over $100,000 — make up 14.3% of Pennsylvania’s population.
These statistics make it easy to see why Pennsylvania instituted consumer protections specifically for annuity customers.
To purchase an annuity in Pennsylvania, you must choose a provider that is licensed to sell annuities in the state. You might also research how Pennsylvania regulates annuities and annuity providers.
During the purchasing process, consider how the annuity would function in your overall retirement plan.
“Important factors that I would encourage a consumer to consider would be, what is the purpose of the annuity?” Ken Orenstein, a Federal Retirement Advisor, told Annuity.org. “Is it to reduce stock market risk? Add a protected growth component to their portfolio? Establish a guaranteed, lifetime income stream?”
Moreover, understanding the state’s regulations regarding annuities and the associated rules is crucial, emphasizes Aamir Chalisa. Part of the retirement planning process involves comprehending the various available products and the nuances specific to the state.
Aamir advises clients to consider carrier ratings, annuity rules, withdrawal penalties and available riders to make informed decisions about which annuity to purchase. Currently, many of his clients opt for fixed annuities due to the high rates, providing them with a fixed rate of return. They appreciate having annuities as part of their portfolio, particularly for the tax-deferred growth opportunity, as taxes are only incurred when funds are withdrawn.
After you purchase the annuity, you’ll have some time to review the terms again and make sure this is the right product for you. During this free-look period, which begins when you receive the contract and lasts 10 days in Pennsylvania, you can cancel your contract without penalty and get a full return of your premium.
Pennsylvania allows some out-of-state residents to purchase annuities with state-approved carriers that they could not otherwise obtain in neighboring states. Recently, I had a client who wanted an annuity with a certain carrier but was unable to obtain it through her home state of NJ. The carrier made an exception for her to purchase the annuity in PA, and as a result, she was able to double the amount of income she would otherwise receive. Pennsylvania can be an excellent state for both residents and non-residents to purchase high-rate annuities.
John Stevenson, CFFOwner and Advisor at Stevenson Retirement SolutionsJohn Stevenson, a Certified Financial Fiduciary®️, specializes in securing retirements with tax-free accounts. With a focus on guaranteed retirement, he’s ensured none of his clients suffer from market fluctuations. As a renowned educator and podcast host, John empowers thousands weekly, sharing his expertise in minimizing taxes and protecting against financial downturns.
Looking To Buy an Annuity in Pennsylvania?
Annuity Regulations and Taxation in Pennsylvania
Pennsylvania has some of the same annuity regulations as other states. In 2021, Pennsylvania became the 19th state to adopt the National Association of Insurance Commissioners’ (NAIC) Suitability in Annuity Transactions Model Regulation.
The new regulations put in place by this law enhance consumer protections by requiring annuity providers and agents to consider a client’s income, age, assets and financial status before recommending an annuity. Essentially, an agent or insurer must do their due diligence and ensure that any products they recommend are in the best interest of the consumer.
Annuities have some protection against creditors in Pennsylvania. The state’s statutes require exemptions for annuities held within a qualified retirement plan, as well as annuity payments made to or for the benefit of the owner’s spouse, children or dependents.
Pennsylvania does not levy a tax on annuity premiums like some other states do. However, the state does have a flat 3.07% state income tax that applies to payments from a non-qualified annuity.
Pennsylvania Annuity Resources
As you consider your annuity options in Pennsylvania, review the company’s ratings to gauge the financial stability of the provider. A financial advisor or annuity expert can answer your questions and guide you in the right direction as you pursue your financial goals.
To learn more about annuities in Pennsylvania, check out these resources:
- Pennsylvania Insurance Department
- Pennsylvania Life & Health Insurance Guaranty Association
- Pennsylvania Annuities Guide
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Frequently Asked Questions About Annuities in Pennsylvania
No, Pennsylvania does not tax annuity premiums. Income payments from a non-qualified annuity are subject to the state’s income tax.
In Pennsylvania, annuities held in a qualified retirement plan and annuity payments made to or for the benefit of the owner’s spouse, children or dependents are protected from creditors.
Pennsylvania’s annuity regulations adhere to the NAIC’s Suitability in Annuity Transactions Model Regulation, requiring annuity providers and agents to ensure that any products they recommend to customers are in their best interest.
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