This letter is written in response to Patricia Sabatini’s article in the Sunday business section, May 14, titled "Savers see little relief."
Yes, savers are not earning much interest on their money at present. A CD which pays only one-half percent interest is nearly an insult.
One possible solution for some people, mostly older folks, would be to purchase an annuity. You will probably need a minimum of $10,000 to purchase an annuity and you will lose your principal, of course, but if your annuity is structured correctly, you will have a lifetime income. The interest rate will depend on your age — older people receive a higher rate of interest.
If you purchase your annuity from a charitable agency that offers annuities, you will also receive tax benefits for several years. It is not unusual for some annuity policies to pay more than 10 percent when the tax advantages are computed.
Reputable life insurance companies also offer annuities. Think about it.