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Types of Annuities.

A plain-English breakdown of the main types of annuities available today — what each one does, who it's built for, and the features worth knowing about.

MYGA SPIA Fixed Index Variable Specialty
MYGA
Multi-Year Guaranteed Annuity

The CD alternative.

Fixed rate, guaranteed for the full term, no market exposure.

A MYGA works like a bank CD, but it's issued by an insurance company. You put money in, they lock in a fixed interest rate for a set term — usually 3, 5, 7, or 10 years. Your principal is protected and grows at the guaranteed rate for the entire term. When the term ends, you can renew, cash out, or roll into a different contract.

Best for

  • Conservative savers who want a guaranteed rate without market risk
  • People at or near retirement looking for predictable growth
  • Anyone comparing CD rates who wants a better yield with the same peace of mind
  • Money you won't need for the full term of the contract

Key features

  • Fixed interest rate for the entire term (3–10 years typical)
  • Tax-deferred growth — no taxes until you withdraw
  • Principal never loses value
  • No market or index exposure
  • 10% penalty-free withdrawals available each year
Good to know: Today's top MYGA rates often beat CD rates by a full point or more, especially at 5–10 year terms. Rates change with the interest-rate environment.
SPIA
Single Premium Immediate Annuity

The pension paycheck.

A lump sum turns into guaranteed monthly income — starting right away.

A SPIA does one thing exceptionally well: it turns a lump sum into a paycheck for life. You give the insurance company a single premium, and within a month or two they start sending you monthly income — guaranteed, on the same day, for as long as you live (or a set period you choose).

Best for

  • Retirees who want to replace a pension they never had
  • Anyone worried about outliving their savings
  • People who want a floor of guaranteed income to cover essential expenses
  • Retirees looking to simplify — no more managing withdrawals

Key features

  • Guaranteed monthly income for life (or a chosen period)
  • Income can never run out — even if you live to 105
  • Options for joint-life (continues to a surviving spouse)
  • Predictable, on the same day every month
  • Higher payouts the older you are when you start
Good to know: SPIAs are the simplest annuity to understand and the most direct answer to "how do I make sure I have income for life?" — but the tradeoff is that once you commit, the lump sum becomes an income stream, not a balance you can pull from.
FIA
Fixed Index Annuity

No downside, some upside.

Growth tied to a market index — without ever losing principal to a market drop.

A Fixed Index Annuity gives you market-linked growth without market risk. Your interest is credited based on how a market index (like the S&P 500) performs each year — but if the market drops, your balance stays put. You give up some of the upside (via caps or participation rates) in exchange for a hard floor: your principal can never lose value from market performance.

Best for

  • People who want growth potential without watching their balance drop in a downturn
  • Anyone who lost sleep during the last market crash
  • Pre-retirees within 10 years of retirement, protecting gains they've already made
  • People who want optional guaranteed lifetime income they can turn on later

Key features

  • Principal never loses value due to market drops
  • Interest credited based on index performance
  • Optional income riders for guaranteed lifetime income
  • Long-term care riders available on newer contracts
  • Tax-deferred growth
  • 10% penalty-free withdrawals each year
Good to know: Newer FIAs have significantly better caps, participation rates, and rider options than contracts sold five or ten years ago. If you own an older FIA, it's often worth checking whether today's version pays you more.
VA
Variable Annuity

Market growth with guardrails.

Full market participation, plus optional guarantees layered on top.

A Variable Annuity invests your money in market subaccounts that behave like mutual funds — so you get the full upside of market performance. What makes it different from a brokerage account is the optional guarantees you can layer on: income riders that promise a certain payout regardless of market performance, or death benefits that lock in gains for your beneficiaries.

Best for

  • Investors comfortable with market risk who also want optional guarantees
  • People who want tax-deferred market growth beyond their 401(k)/IRA limits
  • Anyone who wants the option to convert account value into lifetime income later
  • Higher-net-worth clients using it as part of a broader plan

Key features

  • Full participation in market gains (through subaccounts)
  • Optional living benefit riders (guaranteed income, guaranteed withdrawal)
  • Optional enhanced death benefits that lock in gains
  • Tax-deferred growth on all gains
  • Wide range of investment options
Good to know: Variable annuities have the most moving pieces of any annuity type — the fee stack and rider structure vary hugely between contracts. If you own one, an audit is especially valuable because small differences in the fine print can mean big differences in what you actually take home.
Also worth knowing

Specialty types.

Less common, but the right fit for specific situations.

DIA

Deferred Income Annuity

Like a SPIA, but income starts later — 2, 5, 10, or even 20 years in the future. You lock in the payout amount today; the insurance company sends checks when you say to start.

Best for: People still working who want to guarantee a specific income amount at a specific future date — often used as "longevity insurance" starting at 80 or 85.

RILA

Registered Index-Linked Annuity

Sits between a Fixed Index Annuity and a Variable Annuity. You get index-linked growth like an FIA, but with a "buffer" or "floor" that limits how much you can lose in a bad year — typically 10–20%.

Best for: People who want more upside than an FIA offers, and can accept some limited downside risk in exchange.

Not sure which one fits

Not sure which type you own — or which one fits?

That's exactly what the free audit is for. We identify what you have, compare it against every type available today, and tell you honestly whether it's the right one for your situation.

Get A Free Audit Call (702) 582-7855
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