Not All Annuities Are Created Equal
Why the one you have heard about is not the only one that exists. A plain-language guide to the four main types and how to decide which one fits your income plan.
The Annuity Conversation Most Advisors Skip
Most people who walk into our office have heard of annuities. Many have strong opinions about them. Almost none have seen all four types laid out side by side so they can make a real comparison.
That is what this guide does. We wrote it because the word "annuity" covers four very different products. Treating them as one thing is like calling a pickup truck, a sports car, a minivan, and an SUV all just "cars." They share a category. The similarities end there.
- Fixed annuities: guaranteed rate, no market risk, predictable income
- Variable annuities: market-linked growth with income riders, higher fees
- Fixed indexed annuities: market-linked upside with a floor, no direct losses
- Hybrid annuities: income rider plus death benefit in one contract
- How to match annuity type to your income timeline and risk tolerance
- The questions to ask before signing any annuity contract
Know What You Are Looking At
Each type of annuity serves a different purpose in a retirement income plan. Here is the 60-second version of each.
Fixed Annuity
A guaranteed interest rate for a set period. No market exposure. The predictability of a CD, but with tax deferral and often higher rates. Best for conservative income planners who want certainty above all else.
Variable Annuity
Your money goes into sub-accounts that mirror mutual funds. Growth is tied to market performance. Income riders can guarantee a floor. Higher fee structure. Best for investors willing to accept market risk in exchange for growth potential.
Fixed Indexed Annuity
Linked to a market index (like the S&P 500) but with a guaranteed floor of zero. You participate in some of the upside. You do not participate in the downside. Popular with clients who want growth potential without the sleepless nights.
Hybrid Annuity
Combines an income rider with a death benefit in one contract. Designed to solve two problems at once: guaranteed lifetime income and a legacy for your heirs. Higher complexity. Worth the conversation if both matter to you.
You Are Not Alone in Being Confused
After 25 years and thousands of client conversations, we can tell you that annuity confusion is nearly universal. This guide was written for anyone in any of these situations.
Retiring in the Next 3-5 Years
You are thinking about income now. This guide helps you understand which products are designed to generate guaranteed income and which are better suited for accumulation.
Already Been Shown an Annuity
Another advisor recommended one. Or you saw a radio ad. Or a friend mentioned theirs. Now you want to understand what you are actually looking at before you sign anything.
Skeptical of Annuities
You have heard the horror stories. High commissions, lock-up periods, fine print. A fair read means knowing what the legitimate use cases are. Not every annuity is right for everyone. Some are right for some people.
Planning for a Spouse
Lifetime income that does not die with the first spouse is one of the most common things our clients ask about. This guide covers joint payout options and how to structure income for two lives.
Get the Full Guide
The complete guide covers all four annuity types in detail, side-by-side comparison charts, the questions to ask before buying, and real examples of how each type is used in income plans we build for clients.
Free download. No strings attached.