If you expect the interest rate on high-quality, intermediate-term bonds to average around 4% over the long haul—as Schwab does—then you might consider an interest-rate environment ranging from 3% to 5% (using the familiar 10-year Treasury benchmark) to be generally favorable.1 Anything much below that range, and you might want to wait to purchase a fixed annuity.
1. Source: Schwab Center for Financial Research, "Long-Term Market Return Estimates," April 2009.
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