Are 3-Year Annuities a Good Investment?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding 3-Year Annuities

A 3-year annuity is a financial product where you invest a lump sum of money with an insurance company for three years. During this period, your money earns interest.

Why 3-Year Annuities May Not Be the Best Investment

  • Lower Renewal Rates: When the initial term ends, the annuity often renews at the current interest rate, which could be lower.
  • Inflation Risk: Fixed annuities might not keep pace with inflation, potentially reducing purchasing power.
  • Limited Growth Potential: Compared to other investment options like stocks or mutual funds, annuities usually offer lower growth potential.
  • Liquidity Issues: Accessing your money before the term ends can result in penalties or fees.

Comparing Alternatives

Investment OptionPotential ReturnsLiquidityRisk Level
3-Year AnnuityLow to ModerateLowLow
Stock MarketHighHighHigh


While 3-year annuities provide stability and guaranteed returns, they often fall short in terms of growth potential and flexibility. They may not be the best choice if you’re seeking higher returns or need more liquidity. Contact us today for a free quote.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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