Compare Options That Offer Growth, Guaranteed Income, and Liquidity
A 6-year annuity is a contract between you and an insurance company where you agree to keep your money invested for six years in exchange for guarantees such as growth, income, or both. These annuities typically come with a surrender period of six years, meaning you’ll face withdrawal penalties if you take out more than the free withdrawal amount during that time. This duration appeals to investors seeking a balance between medium-term growth and protection from market volatility or outliving their savings.
Annuity rates change weekly. Compare 6-year annuity rates and shop the entire market to lock in the highest yield before it expires.
Types of 6-Year Annuities
Each type of 6-year annuity has distinct benefits, depending on your goals: guaranteed returns, market-linked growth, or income for life.
6-Year Multi-Year Guaranteed Annuity (MYGA)
- How It Works: Offers a guaranteed fixed interest rate for all 6 years. Think of it as a “CD-like” annuity with higher rates and tax deferral.
- Who It’s For: Ideal for conservative investors who want predictability and don’t need access to funds for 6 years.
- Pros: Guaranteed growth, no market risk, tax-deferred interest, principal protection.
- Cons: Limited liquidity, early withdrawal penalties.
- Can Be Funded With: Non-qualified funds, IRAs, Roth IRAs, 401(k) rollovers.
6-Year Fixed Index Annuity (FIA)
- How It Works: Your return is tied to an index (like the S&P 500) but you’re protected from losses. Interest is credited based on index performance, subject to cap or participation rates.
- Who It’s For: People who want better growth potential than a MYGA, but can’t afford market losses.
- Pros: Downside protection, potential for higher interest, optional guaranteed income riders.
- Cons: Limited upside due to caps and spreads, complex crediting strategies.
- Can Be Funded With: Qualified and non-qualified accounts, including IRAs and 403(b)s.
6-Year Registered Index-Linked Annuity (RILA)
- How It Works: Offers a mix of protection and growth by exposing you to some downside (buffered losses) for more upside potential.
- Who It’s For: Investors with moderate risk tolerance seeking higher growth potential than a FIA.
- Pros: Higher upside than FIAs, limited downside via buffers or floors.
- Cons: Market risk (partially), performance is not guaranteed, more complex.
- Can Be Funded With: IRAs, Roth IRAs, brokerage accounts.
6-Year Variable Annuity
- How It Works: Invested in sub-accounts similar to mutual funds. Returns and losses vary with the market.
- Who It’s For: Long-term investors comfortable with full market exposure.
- Pros: Highest growth potential, optional income or death benefit riders.
- Cons: High fees, market risk, complexity.
- Can Be Funded With: IRA rollovers, Roth IRAs, or non-qualified assets.
What Happens After the 6 Years?
Once the surrender period ends:
- You can withdraw without penalties.
- You can renew the contract at updated terms.
- You may annuitize the contract for lifetime income.
- You can 1035 exchange it into another annuity without triggering taxes.
Surrender Charge Schedule (Typical for a 6-Year Annuity)
| Year | Surrender Charge |
|---|---|
| 1 | 7% |
| 2 | 7% |
| 3 | 6% |
| 4 | 5% |
| 5 | 4% |
| 6 | 2% |
| 7+ | 0% |
Note: Many annuities allow 10% penalty-free withdrawals annually during this time.
What Happens at Death?
If you pass away during the annuity term:
- Beneficiaries receive the full account value—not subject to surrender charges.
- MYGAs pay a lump sum death benefit.
- Indexed, RILA, and variable annuities may also offer enhanced death benefits depending on the contract.
Who Should Consider a 6-Year Annuity?
You need this if:
- You want higher rates than CDs or Treasury bonds.
- You can commit funds for 6 years without full access.
- You want tax-deferred growth and/or lifetime income guarantees.
- You are preparing for retirement within the next decade and want to lock in a safe accumulation strategy.
You don’t need this if:
- You need high liquidity or may need large withdrawals in under 6 years.
- You are younger and better suited for longer-term accumulation vehicles like IRAs with mutual funds or ETFs.
- You prefer to manage your own portfolio and accept market volatility.
Other Insurance to Consider With a 6-Year Annuity
- Long-Term Care Insurance: To avoid draining your annuity in a health crisis.
- Life Insurance: Pairs well with annuities for tax-free legacy planning.
- Disability Insurance: Protects income while your annuity accumulates.
Why Consider Annuities for Income?
If your primary goal is guaranteed lifetime income, consider adding a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider to your fixed indexed annuity. This lets you turn your 6-year annuity into a pension-like income stream after the accumulation period. Annuities can be purchased using:
- Traditional IRA
- Roth IRA
- 401(k) rollover
- SEP IRA
- Non-qualified funds (cash, savings, brokerage)
Get Expert Help to Compare the Best 6-Year Annuities
Not all annuities are created equal. Rates, features, and income options vary widely. Contact The Annuity Expert for free quotes and help comparing the top 6-year MYGAs, fixed index annuities, and income options tailored to your financial plan.
Book A Free Consultation
Get help from a licensed financial professional. This service is free of charge.
Let Us Answer Your Questions
Not quite ready for a meeting, but you have a question that needs answering? We’re happy to help. Leave an inquiry below, and one of our staff will respond via email.