PENTECO  Financial & Insurance Services

Serving the Nation's Capital & Mid-Atlantic Region
For Over 25 Years
(703) 799-2500 / (866) 4PENTECO

Newsletter Spring 2004

As the U.S. economic recovery continues, it appears likely that interest rates will continue to trend upward.  General consensus agrees that we will likely see a one-quarter point (0.25%) increase in rates by June 30, with the Fed Funds rate reaching 2.25% (from the current 1.00%) by year end 2004.  While this may act as a damper to corporate earnings, and thus stocks generally, such a gradual rate increase will be welcome news to retirement savers. 

Annuity interest rates have already begun to reflect these upward trends, with most annuities now paying a base rate of at least 3.50% or better.  Remembering that annuity interest rates "float" annually, and thus should rise over the next several years, many of the longer-term annuities are now guaranteeing double-digit returns (see, for example, the Allianz PowerDex Annuity which now offers an immediate 10% cash bonus and pays a huge 13.85% First-Year return and an attractive 5.49% Five-Year yield, each year tax deferred). 

The following is this month's list of the Best of the Best...from shortest duration to longest.  Note that longer durations offer higher rates and higher cash bonuses.

ANNUITY COMPARISONS
Best Performing Annuities, from Shortest to Longest

Notes Annuity Type Bonus? Duration 1st Year 5-Year
Best 6 Year Physician's VISTA INT Only NO 3-10 5.25% (6-year) 3.58%
CD-like Allianz Dominator INT Only NO 5-10 3.00%
3.50%
3.00%
3.50%
Best Short Term F&G
Index5
INT/Index NO 5 3.40% Varies
  Reliance Apollo INT Only 2% 7 5.25% 3.65%
Best 7 Year Reliance Eleos INT Only 3% 7 6.55% 4.15%
Best 10  Year
(>100K)
Allianz
Power7
INT Only 5%<100
7% 100+
10
10
8.41%
10.48%
4.26%
4.66%
  Reliance
Argus
INT Only 5% 10 8.30% 4.30%
Best 10 Year (<100K) NWL
Prevail7
INT Only 7% 10 9.95% 4.36%
  Allianz
Power 5
INDEX Only 5% 12 INDEX ONLY INDEX ONLY
Best 12 Year Allianz FlexDex INT/ Index 3%<100
5%>100
12
12
6.35%
8.41%
3.86%
4.26%
Best 15 Year "Straight" NWL
Flex85
INT Only 8% 15 11.24% 4.65%
Best Monthly
Pt-to-Pt
Allianz
MasterDex
INT/Index 10% 15
(5x10)
13.30% 4.98%
Best Annual
Pt-to-Pt
Allianz
PowerDex
INT/Index 10% 15
(5x10)
13.85% 5.49%

PENTECO, LLC
www.pentecofinancial.com
Correspondence: P.O. Box 210, Mount Vernon, VA  22121 (703) 799-2500/ (866) 4PENTECO/ (703) 799-7489 fax
email: info@pentecofinancial.com

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