Fixed Annuities
Safe, guaranteed growth and steady retirement income without stock market risk.
Current guaranteed rate range for top-rated 3- to 5-year multi-year guaranteed annuities (MYGAs) as of April 2026. Rate is locked for the full term, and principal is never exposed to market losses.
Middle-of-market range for illustration. Your actual rate depends on your age, health, and the specific product. Your Personalized Plan gives you Tom’s real recommendation with real numbers.
A fixed annuity provides a guaranteed rate of return on your contributions, backed by the insurance company's ability to pay. Unlike variable annuities — which fluctuate with market investments — fixed annuities give you certainty. I don't sell variable annuities.
Insurance companies survived the Great Depression when Wall Street didn't. In 2008, diversified insurers fared best. Fixed annuities offer a level of stability that few financial products can match for retirement income.
How Fixed Annuities Work
Two distinct phases: your money grows tax-deferred during accumulation, then converts to predictable income when you're ready.
Accumulation Phase
Your money grows tax-deferred at a guaranteed fixed rate until you're ready to receive income. You can contribute a lump sum or periodic premiums depending on the contract.
The insurance company guarantees your interest rate for the agreed period — no volatility, no guessing what your balance will be.
Distribution Phase
When it's time for payouts, your income is based on your account value, your age, and the payout period you select. Options include:
- A set number of years
- Income for the rest of your life
- Joint life payouts covering a spouse
- Lump-sum distribution
Key Benefits of Fixed Annuities
Guaranteed Rate
Your interest rate is fixed by contract. You know exactly what your money will earn over the accumulation period — no market dependency.
Tax-Deferred Growth
Earnings accumulate without annual taxation. You only owe taxes when you take distributions — potentially at a lower rate in retirement.
Predictable Income
Convert your accumulation into a reliable income stream. Choose the duration — set years, lifetime, or joint-life — to match your retirement plan.
Safer Than Bonds
Unlike bonds, fixed annuities don't fluctuate with interest rate changes. And the annuitization feature converts your savings to lifetime income — bonds can't do that.
Carrier-Backed Security
Backed by the financial strength of the issuing insurance company — not subject to stock market volatility. Carrier rating and longevity matter.
IRA & Rollover Compatible
Fund with qualified plan money such as an IRA rollover. Distributions will be taxable as income — plan with your advisor for the most tax-efficient approach.
Who Should Consider a Fixed Annuity?
When choosing a fixed annuity, I look at the insurer's ability to pay, their longevity, their financial rating, their performance during 2008, and their guaranteed rate. As an independent agent, I compare options across multiple top-rated carriers to find the right fit for your retirement goals.
Common questions about Annuities
What’s the difference between a fixed annuity and a fixed indexed annuity?
A fixed annuity (often a MYGA) pays a guaranteed interest rate for a set number of years, like a CD. A fixed indexed annuity ties your growth to a market index such as the S&P 500, with a floor of 0% — you share in gains up to a cap, and you never lose principal in a down year.
Is my principal really safe?
Yes. With fixed and fixed indexed annuities, your principal is not exposed to market losses. The carrier guarantees it. That’s the core reason people move retirement dollars into annuities once they’re within ten years of needing the income.
Can I access my money if I need it?
Most annuities let you withdraw up to 10% of the value per year without surrender charges, and many include waivers for things like nursing-home stays or terminal illness. After the surrender period ends (typically 3–10 years), the whole balance is accessible. Tom picks contracts where liquidity actually matches your plan.
Does Tom sell variable annuities?
No. Tom works only with fixed and fixed indexed annuities — products where your principal is protected. Variable annuities put principal at market risk, which isn’t a fit for the conservative retirement planning most people come to Tom for.
How are annuity income payments taxed?
You pay ordinary income tax on the growth portion as you withdraw it. If the annuity was funded with after-tax money, the original principal comes back tax-free. IRA-funded annuities are fully taxable as withdrawn, just like a regular IRA.
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