Fixed Annuities
A fixed annuity pays a guaranteed interest rate for a set term — think of it as a CD issued by an insurance company. Rates have been competitive in recent years, and the appeal is simplicity: you know the rate, you know the term, and the value does not move with the market.
The trade-off is access. Your money is committed for the contract period, and withdrawing early triggers a surrender charge. Fixed annuities suit money you genuinely will not need for the length of the term.
Immediate Annuities
An immediate annuity converts a lump sum into guaranteed monthly income for the rest of your life — essentially building your own pension. For retirees whose Social Security and pension do not fully cover fixed monthly expenses, this can close the gap permanently.
The trade-off is permanence. Once you hand over the premium, you generally cannot get the lump sum back. That is why we size these carefully rather than committing a large share of your savings.
Read the Contract Terms
The risk with a straight annuity is not market performance — it is signing terms you did not fully understand. Before anything is signed, you should be able to state the guaranteed rate or monthly payout, the surrender period and charge schedule, whether payments continue to a spouse, and the financial strength rating of the carrier standing behind the guarantee.
When a Straight Annuity Makes Sense
These products fit best when you need guaranteed income to cover essential expenses, when predictability matters more to you than upside, when you have other liquid savings for emergencies, and when the committed amount is a sensible portion of your total picture — not most of it.
When to Be Cautious
Be cautious if the product is being pushed by an agent who represents only one company, if the surrender period runs longer than seven years, if you cannot explain in your own words how the contract works, or if it would tie up money you may realistically need sooner.
Our Approach
We work with fixed and immediate annuities only — straightforward, guaranteed-income contracts. We compare carriers, walk through the terms in plain language, and will tell you honestly when an annuity is not the right fit for your situation.
