Current Annuity Rates in New Jersey
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| Product |
Rate
|
Guarantee Period
|
Surrender Period
|
AM Best Rating
|
|---|---|---|---|---|
|
GCU Insurance 1 + 4 Choice |
4.25% | 1 Years | 5 Years | A- |
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 |
4.85% | 5 Years | 5 Years | A- |
|
Security Benefit Life Insurance Company Advanced Choice |
4.85% | 7 Years | 7 Years | A- |
|
Security Benefit Life Insurance Company Advanced Choice |
4.60% | 3 Years | 3 Years | A- |
Advantage 5 Advisory |
5.05% | 5 Years | 5 Years | A++ |
|
American Freedom Aspire 3 |
4.45% | 3 Years | 3 Years | A++ |
|
American Freedom Aspire 5 |
4.55% | 5 Years | 5 Years | A++ |
|
American Freedom Aspire 7 |
4.00% | 7 Years | 7 Years | A++ |
Buying an Annuity in New Jersey
When you buy an annuity in New Jersey, you may benefit from several different rules and regulations that help ensure annuity providers offer you a contract that makes sense for your situation.
The state mandates a 10-day free look period, allowing a chance to review your contract and walk away without penalty. When you buy an annuity, the provider you are purchasing through must also provide a disclosure statement explaining how the contract works.
Annuity companies must conduct a suitability review as well, to ensure the product offered genuinely makes sense for your financial situation.
While New Jersey can be a great place to purchase an annuity contract, there are instances where buying an annuity outside of the state may be more beneficial. For example, one of my clients, who was a resident of New Jersey, was able to purchase an annuity within Pennsylvania and consequently received a higher lifetime income payout. It’s important to note that certain rules and restrictions apply when purchasing an annuity out of state, so it’s advisable to consult with an annuity expert who is knowledgeable about the process.
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 New Jersey?
Regulations/Tax Implications in New Jersey
New Jersey is part of a small group of states with Annuity providers that have yet to enact the most recent revisions of the NAIC Suitability in Annuity Transactions model. These regulations are made to help protect customers from predatory practices.
As of early 2024, 40 states had adopted the latest revisions.
One potential downside for New Jersey residents interested in buying an annuity is that the state’s high tax rates may eat into your contract’s eventual payout.
State income tax rates range from 1.4% to 10.75% depending on your financial situation. That 10.75% rate is one of the highest found anywhere in the nation, with only California and New York surpassing it.
New Jersey Resources
Similar to other states, the New Jersey Department of Banking & Insurance offers lots of free and publicly available information to help potential annuity customers make the right choice for themselves.
This includes a full buyer’s guide on deferred annuities.
The New Jersey Department of Banking & Insurance’s website offers more resources.
New Jersey also has a state guaranty association, the New Jersey Life & Health Guaranty Association, originally created in 1992.
Companies that issue annuities within the state require a membership of the association, adding an extra layer of protection for customers.
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FAQs About Annuities in New Jersey
New Jersey requires potential buyers to have a 10-day free look period, a disclosure statement of the contract and for companies to conduct a suitability review before selling an annuity to a customer.
New Jersey is not one of the states that levies a tax on annuity premiums, meaning your annuity contributions will be tax-deferred.
Annuities are regulated at the state level and New Jersey has in place several stringent regulations to help protect customers from hasty decisions or predatory practices.
Avoid Mistakes That Could Cost You Later