Are Fixed-Term Annuities a Good Idea?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Types of Fixed-Term Annuities

Fixed-term annuities fall into two categories: period-certain annuities and Multi-Year Guaranteed Annuities (MYGAs).

Period-Certain Annuities

  • Definition: Pays back your own money over a set period, with some interest.
  • Professional Opinion: Not the best choice. It essentially returns your own money with minimal interest, making it less appealing for long-term financial growth.

Multi-Year Guaranteed Annuities (MYGAs)

  • Definition: Offers guaranteed growth with a fixed interest rate over a specific term.
  • Advantages: Can be beneficial if the interest rate is high. Suitable for those seeking guaranteed growth.
  • Drawbacks for Retirement Income: MYGAs may not be ideal for retirement income due to the instability of income in varying interest rate environments.

Recommended Alternative for Retirement Income

Comparison of Annuity Types

Annuity TypeProsConsBest For
Period-Certain AnnuitySimple structure, predictable paymentsLimited growth potential, returns own fundsShort-term financial objectives
Multi-Year Guaranteed Annuity (MYGA)Guaranteed growth, fixed interest rateIncome instability in varying rates, not ideal for retirement incomeMid-term growth objectives
Fixed Index Annuity with Lifetime Income RiderStability in income, potential for growthMore complex structure, requires understanding of market trendsLong-term retirement income planning


While fixed-term annuities like MYGAs offer benefits like guaranteed growth, they may not be ideal for retirement income due to income instability in fluctuating interest rate environments. A fixed index annuity with a guaranteed lifetime income rider is recommended for more stable retirement income planning. This guide provides a clear comparison to help you make an informed decision. 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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