what happens when interest rates drop to zero?

Reply #3

gy65 — Tue, 24 Sep 2019 19:51:44 GMT

Advance to 3:31 . . .

Reply #2

KY Floyd — Mon, 23 Sep 2019 04:53:02 GMT

The cash value will always be the cash value, and players with a lick of sense already know that's the value that matters. If interest rates drop to zero then the annuity value will be the same as the cash value. I'm skeptical that it would happen in the real world, but in theory negative rates would result in an annuity value that's less than the cash value, but even when the annuity is 60% more than the cash value almost nobody takes it.

I'd kind of like to see negative interest rates and a... [ More ]

Reply #1

DELotteryPlyr — Mon, 23 Sep 2019 00:20:57 GMT

GOOD QUESTION!!!

I am REALLY hoping we don't go to negative interest rates here in the US

what happens when interest rates drop to zero?

savagegoose — Sun, 22 Sep 2019 03:59:28 GMT

just wondering if interest rates drop to negative will the advertised annuity amount become less than the cash amount?

maybe the will stop advertising the annuity amount and start making it annual payments to disguise it