One hundred thousand dollars in an annuity today will buy you about $5,700 per year in income.

If you have $1 million to give away to some insurance guy, you can earn about 10 times that, or $57,000. Easy math!

That’s not a lot of income for a $1 million investment.

Consider this… 25 years ago, that same $1 million paid an annual return of $116,000. So right now, that $57,000 really looks like chump change.

The amount of money you can earn from an annuity or interest-bearing account is a function of interest rates… and they have been in the toilet for almost 10 years.

And if the results of the recent Fed actions are any indication, they aren’t going anywhere anytime soon.

The only thing more unsettling than a 50% drop in income is that, according to a measure called the “Annuity Factor,” our cost of living has doubled during the same period!

Now you know why it seems like you’re always broke!

But this isn’t about just interest rates.

The Annuity Factor is a function of both interest rates and longevity. And as we’re well aware, the longevity bonus medical science has handed us is allowing us to live years longer than we ever thought possible.

So we have a double whammy… low interest rates and growing life expectancies. But we still have to pay for our remaining time here on Earth.

Add to the mix the fact that we have the highest Annuity Factor ever recorded. And there doesn’t appear to be any relief on the horizon from the traditional sources: CDs, savings and annuities.

Those of us living on a fixed income are in a real pickle. And there aren’t any magic fixes. Most of the remedies for this mess are ones you’ve heard of before…

Don’t file for your Social Security until age 70. In most cases, you can realize as much as a 40% increase in your monthly benefits over your FRA (forward rate agreement) payout.

Save as much as you can. Just funding your 401(k) and IRA won’t be enough.