Annuities 2026: Types, Pros, Cons & Are They Worth It?
Annuities 2026: Types, Pros, Cons & Are They Worth It? Annuities promise guaranteed retirement income — but they are among the most misunderstood financial products. This guide explains every type, the real pros and cons, fees, and whether an annuity fits your retirement plan. What Is an Annuity? A contract with an insurance company: you pay a lump sum or premiums, and the insurer pays you income — either immediately or later, for a set period or for life. Annuities are designed for retirement income security, not growth. Types of Annuities Fixed Annuity: Guaranteed interest rate (like a CD). Safe, predictable. 2026 rates: 4-5.5% for 5-year terms. Variable Annuity: Invested in subaccounts (mutual fund-like). Growth potential, but market risk + high fees. Fixed Indexed Annuity (FIA): Returns tied to market index (S&P 500) with downside protection + caps. Popular middle ground. Immediate Annuity (SPIA): Lump sum → monthly payments starting immediately, for life or set pe...