With its roots going back to 1882, the Knights of Columbus (KoC) is a fraternal or mutual benefit society for Catholics in the U.S. Only members and their families can buy its annuities, and to be a member (or knight), you must be male and age 18 or older. Knights who are insurance agents for the organization have made serving fellow Catholics their life’s work, and each is assigned to 800 families. In addition to annuities, the Knights of Columbus sells life insurance, long-term care insurance and disability income insurance.
With so many options available, annuities can be hard to understand. But with the help of a financial advisor, you can cut through the complexity and determine which annuity and riders make the most sense for you.
| Annuity | Fees | Annuity Type | Minimum Initial Premium | More Information |
|---|---|---|---|---|
| KoC Single Premium Deferred Annuity Find an Advisor | Single premium deferred annuity | $0 |
Annuity TypeSingle premium deferred annuityMinimum Initial Premium$0 |
|
| KoC Flexible Premium Deferred Annuity Find an Advisor | Flexible premium deferred annuity | $100 |
Annuity TypeFlexible premium deferred annuityMinimum Initial Premium$100 |
|
| KoC Single Premium Immediate Annuity Find an Advisor | Single premium immediate annuity | $0 |
Annuity TypeSingle premium immediate annuityMinimum Initial Premium$0 |
Before handing over your nest egg, you want to make sure the insurance company’s finances are strong. After all, it - and only it - backs its guarantees. Credit ratings agency A.M. Best most recently gave the Knights of Columbus an A+ (on a scale from A++ to F) for its financial strength.
KoC Single Premium Deferred Annuity
The Knights of Columbus publishes only skeletal information about its annuities online. Its single premium deferred annuity is a fixed annuity. You pay one premium when you sign the contract and your money will earn a fixed interest rate. According to an undated contract found online, this rate is 3%. Also, it appears that the guaranteed period is for seven years.
Unfortunately, we could not find any information about payments once you annuitize, death benefits or other riders. We also could not confirm the minimum payment or maximum issue age.
Fees
Most fixed annuities do not have sales or annual administrative fees. Your sales agent’s commission will have been factored into your interest and payout rates.
But there are surrender charges for early withdrawals. It appears that these charges start at 5% and gradually decrease to 2% during the guaranteed period. Afterward, there is no penalty for making withdrawals. Also, if you have more than $5,000 in your account, you are allowed to take out up to 10% every year.
That said, if you are younger than 59.5, your withdrawals may be subject to a 10% IRS penalty on top of income tax.
Realistic Return Expectations
The Knights of Columbus guarantees that your principal will not lose value during the accumulation phase. At 3%, the interest rate is better than rates for most savings accounts and certificates of deposit (CDs) at the time of this article’s writing. But if there’s any chance you will need the money within seven years, you may want to get a CD instead. Top CD rates are slightly lower, but the penalty for early withdrawals will not touch your principal. Often, it’s just 90 days of interest.
KoC Flexible Premium Deferred Annuity
The Knights of Columbus also offers a flexible premium deferred annuity. Its terms are the same as the single premium’s except you can make contributions after the initial payment. The minimum payment, according to an undated contract found online, is $100, and the interest rate is 3%. This rate appears to be guaranteed for seven years.
Unfortunately, we could not find any information about payments once you annuitize, death benefits or other riders. We also could not confirm the maximum issue age.
Fees
Most fixed annuities do not have sales or annual administrative fees. The sales commission that your sales agent receives will have been factored into your interest and payout rates.
Early withdrawals, though, will incur surrender charges. These appear to start at 5% and gradually decrease to 2% during the guaranteed seven-year period. Afterward, there is no penalty for making withdrawals. If you have more than $5,000 in your account, you are allowed to withdraw up to 10% every year, penalty-free.
That said, annuities grow tax deferred. So if you are younger than 59.5, your withdrawals will be subject to a 10% IRS penalty plus income tax.
Realistic Return Expectations
At 3%, the guaranteed interest rate beats the rates that banks are offering for savings accounts and certificates of deposit (CDs) at the time of this article’s writing. But if you think you may need to touch the money within seven years, you may be better off with a CD instead. With CDs, the penalty for early withdrawals is often only the forfeiture of 90 days of interest.
KoC Single Premium Immediate Annuity
As its name suggests, an immediate annuity begins paying you right away in exchange for your single premium. Unfortunately, the Knights of Columbus does not make public its payout terms. Usually, though, the amount is based on your age - and if not illegal in your state, on your gender - and payments are for life.
There is also no public information about income benefits or what happens to your principal should you die before it has been paid out.
Fees
Most immediate annuities do not have sales or annual administrative fees. Your sales agent’s commission will have been factored into your payout rates.
Generally, immediate annuities do not allow for early withdrawals.
Realistic Return Expectations
How likely you are to get your money back - and then some - depends on how long you live, of course. It’s hard to say any more without more information. But generally, top immediate annuities today pay around $5,000 for a $100,000 premium to a 60-year-old male, according to Blueprint Income, a digital marketplace for annuities.
Tips for Retirement Planning
- With fixed annuities, you are exchanging potential growth for safety. A financial advisor can help you manage your risk and investment strategy. To find the right pro for you, use SmartAsset’s matching tool. It’ll connect you with up to three advisors, based on your needs and goals.
- How much annuity do you need? Experts generally recommend covering your monthly expenses in retirement with an income stream. This number, in turn, is approximately 70% of your current expenses. So if your current regular expenses are $3,000 per month, you’ll need approximately $2,100 per month, which is $25,200 annually. But before reverse engineering how much annuity that requires, you’ll want to subtract your Social Security benefits. To find out how much those will be, use our Social Security calculator.
