The best annuities for retirement income depend on when you need the money. SPIAs from carriers like Corebridge and Athene start paying right away. MYGAs from Equitrust or Aspida grow your money safely first. Fixed index annuities and QLACs handle income you’ll turn on later. Most retirees we work with combine two types.
You’ve spent decades saving. Now comes the harder question: how do you turn that nest egg into income you can’t outlive?
That’s where annuities come in. But here’s the thing: not all annuities are built for retirement income. Some are designed for growth. Others focus on leaving money to heirs. And a few are specifically engineered to give you a reliable paycheck for life.
After over 30 years helping people plan for retirement, we’ve seen what works and what doesn’t. We’re also going to name names. Most articles on this topic explain annuity types and stop there. We’ll walk you through the types that actually deliver retirement income, and tell you which carriers we place them with.
What Makes an Annuity Good for Retirement Income?
Before we get into specific products, it helps to understand what separates an income-focused annuity from everything else.
A good retirement income annuity does a few things well. It provides guaranteed payments you can count on. It protects your principal from market downturns. And it comes from a financially strong insurance company that will be around to honor those guarantees 20 or 30 years from now.
You also want to pay attention to fees, surrender periods, and flexibility. Some annuities lock up your money for 10 years or more. Others let you access a portion each year without penalties. The “best” annuity is the one that matches your income needs, not the one with the flashiest marketing.
Best Annuity Types for Retirement Income
SPIAs (Single Premium Immediate Annuities)
If you need income now, this is where most people start. A SPIA converts a lump sum into guaranteed monthly income that starts almost immediately. You hand over a chunk of savings, and the insurance company sends you a check every month for life.
SPIAs are simple. There’s no market exposure, no moving parts, and no complicated crediting strategies. You know exactly what you’re getting before you sign.
We place SPIAs with Corebridge, Nationwide, Athene, North American, and Lincoln. Payout rates on immediate annuities move often, and the carrier paying the most this month may not be paying the most next month. That’s the main reason we shop all five rather than defaulting to one.
The trade-off? Once you hand over that lump sum, you typically can’t get it back. That’s why we rarely recommend putting all your retirement savings into a single SPIA. It works best as one piece of a larger income plan.
Best for: Retirees who want guaranteed lifetime income starting right away and have other assets for emergencies.
MYGAs (Multi-Year Guaranteed Annuities)
Think of a multi-year guaranteed annuity as a CD’s higher-earning cousin, issued by an insurance company. You deposit a lump sum, lock in a guaranteed rate for a set term, and your money grows tax-deferred until you need it. Terms usually run 3 to 10 years.
MYGAs don’t provide immediate income like a SPIA. They’re an accumulation tool. But they’re a solid way to grow retirement savings safely before converting to income later.
Our MYGA carriers are Equitrust, North American, Lincoln, Axonic, and Aspida. Two of those names may be unfamiliar. Axonic and Aspida are newer to the annuity space, and they’ve been competitive on multi-year rates. Newer doesn’t mean weaker, but it does mean the financial strength rating deserves a closer look before you commit. We go through that with every client who asks about them.
Best for: Pre-retirees or recent retirees who don’t need income today but want safe, predictable growth for the next few years.
Fixed Index Annuities with Income Riders
A fixed index annuity ties your growth to a market index like the S&P 500 without putting your principal at risk. When the market goes up, you earn interest based on a portion of those gains. When it goes down, you don’t lose a penny. Add an income rider and you get a guaranteed income stream you can turn on when you’re ready.
We use these a lot for clients who are 5 to 15 years from needing income. Our FIA carriers are Lincoln, Nationwide, Global Atlantic, Athene, North American, and MassMutual. Because the product differences here run deep, we built a separate breakdown comparing the five FIA contracts we place most often. Start there if a fixed index annuity is what you’re weighing.
Best for: People who want growth potential with downside protection and a guaranteed income option they can activate later.
Traditional Fixed Annuities
A traditional fixed annuity pays a set interest rate for the life of the contract. It’s the most straightforward option on this list. No index strategies, no riders to add, no complicated moving parts.
We place these with National Life, Global Atlantic, National Western Life, and Equitrust. These work well for conservative savers who want something predictable and easy to understand. Your money is safe and grows steadily.
Best for: Conservative savers who prioritize simplicity above all else.
QLACs (Qualified Longevity Annuity Contracts)
Here’s one most people haven’t heard of. A QLAC lets you defer income from your IRA or 401(k) until as late as age 85. You’re buying longevity insurance, a guaranteed income stream that kicks in later in life when you’re most likely to need it.
QLACs also reduce your required minimum distributions in the meantime. That can lower your tax bill during your early retirement years.
The IRS caps how much you can move into a QLAC, and that cap gets adjusted for inflation. Give us a call and we’ll tell you the current figure and what it means for your account balance.
Our QLAC carriers are MassMutual, Western & Southern, Pacific Life, and Lincoln. Not every carrier writes QLACs, so the field here is smaller than it is for other annuity types.
Best for: Retirees with IRA or 401(k) assets who want to reduce RMDs now and guarantee income later.
Why Variable Annuities Aren’t on This List
You’ll notice we skipped variable annuities. That’s on purpose. Variable annuities invest directly in the market, which means your principal can drop when the market drops. They also tend to carry higher fees than the products above.
For retirement income specifically, we think the trade-off rarely works out. If you want market upside, there are cheaper ways to get it. If you want guaranteed income, the products on this list do it without putting your principal at risk.
Comparing Annuity Types for Retirement Income
| Annuity Type | Income Starts | Risk Level | Growth Potential | Carriers We Place |
|---|---|---|---|---|
| SPIA | Immediately | Very low | None (fixed payout) | Corebridge, Nationwide, Athene, North American, Lincoln |
| MYGA | After term ends | Very low | Fixed rate, tax-deferred | Equitrust, North American, Lincoln, Axonic, Aspida |
| Fixed Index Annuity | You choose when | Low | Moderate, index-linked | Lincoln, Nationwide, Global Atlantic, Athene, North American, MassMutual |
| Traditional Fixed | After term | Very low | Low, fixed rate | National Life, Global Atlantic, National Western, Equitrust |
| QLAC | Deferred to age 85 | Very low | None (fixed payout) | MassMutual, Western & Southern, Pacific Life, Lincoln |
How to Choose the Right Annuity for Your Retirement
When You Need Income Now vs. Later
Timing is the biggest factor. If you’re already retired and need income this year, a SPIA is probably your best starting point. If you’re still 5 to 15 years out, a fixed index annuity with an income rider gives you time to grow while locking in future guarantees. And if you’re worried about running out of money in your 80s or 90s, a QLAC fills that specific gap.
Many retirees use a combination. A SPIA for immediate income, a MYGA or fixed index annuity for mid-term growth, and a QLAC for longevity protection. That layered approach covers your bases at every stage.
How Much Guaranteed Income Do You Actually Need?
Start with your monthly expenses. Subtract Social Security and any pension income. The gap between what’s coming in and what’s going out is what your annuity needs to cover.
You don’t need to annuitize everything. We typically recommend keeping a portion of your savings liquid for emergencies, healthcare costs, and surprises. The annuity covers your baseline needs. Everything else stays flexible.
What to Look for in an Annuity Carrier
The guarantees in your annuity are only as strong as the company behind them. Look at financial strength ratings from AM Best. Check the surrender period and make sure you’re comfortable with the timeline. And read the fee disclosure carefully, especially on products with income riders.
Don’t just chase the highest rate. A slightly lower rate from a top-rated carrier is almost always better than the best rate from a company you’ve never heard of.
A Closer Look at the Carriers We Use
Naming carriers is easy. Explaining why they made the list takes more work, so we’ve written full reviews on the ones we place most often.
Global Atlantic writes both fixed index and traditional fixed annuities for our clients, and their income rider lineup is competitive. North American shows up across three of the five annuity types above, which makes them one of our most-used carriers overall. Lincoln appears in four categories, and their income products tend to keep things simple.
National Life is a mainstay for traditional fixed annuities, and Pacific Life is one of the few carriers still writing QLACs. Each review covers financial strength ratings, product lineup, and where we think the carrier fits best.
Common Annuity Mistakes Retirees Make
We’ve seen these come up again and again over the years.
Putting too much into one product. Annuities work best as part of a diversified plan. Locking all your savings into a single annuity limits your flexibility if your needs change.
Ignoring surrender periods. If you need access to your money in 3 years, don’t buy an annuity with a 10-year surrender schedule. Match the product to your timeline.
Chasing the highest rate without context. A high rate doesn’t mean much if the carrier has a weak financial rating or the product carries fees that eat your returns.
Not understanding how income riders work. The income account value on a fixed index annuity is not the same as your actual cash value. It’s a calculation used to set your future income payments. Make sure you understand how a guaranteed income rider actually works before you buy.
Frequently Asked Questions
What is the safest annuity for retirement?
Fixed annuities and MYGAs are generally considered the safest because they offer guaranteed rates with no market exposure. SPIAs are also very safe since your income is guaranteed by the insurance company for life. The key is choosing a carrier with strong financial ratings from AM Best.
Which carriers do you place annuities with?
We’re independent, so we shop across carriers rather than representing one company. For SPIAs we use Corebridge, Nationwide, Athene, North American, and Lincoln. MYGAs go through Equitrust, North American, Lincoln, Axonic, and Aspida. Fixed index annuities come from Lincoln, Nationwide, Global Atlantic, Athene, North American, and MassMutual. QLACs come from MassMutual, Western & Southern, Pacific Life, and Lincoln.
How much money do I need to buy an annuity for retirement income?
Minimums vary by product and carrier, and most start somewhere in the $10,000 to $100,000 range. Immediate annuities usually need more than deferred products to generate meaningful monthly income. The right amount depends on how much income you need and what other sources you already have.
Can I lose money with an annuity?
With fixed annuities, MYGAs, and SPIAs, your principal is protected. You won’t lose money to market downturns. Fixed index annuities protect your principal too, though they can credit zero interest in years when the index performs poorly. Variable annuities do carry market risk, which is why we left them out of this guide.
What’s the difference between an annuity and a pension?
They work similarly. Both provide guaranteed monthly income in retirement. The difference is that a pension comes from your employer, while an annuity is a contract you buy from an insurance company. Think of an annuity as a way to create your own personal pension.
Key Takeaways
- SPIAs are the go-to for immediate income. They convert a lump sum into guaranteed lifetime payments starting right away.
- MYGAs and fixed index annuities work best for future income. Use them to grow your money safely before you need it.
- Don’t put all your eggs in one annuity. A layered approach covering immediate, mid-term, and long-term needs gives you the most flexibility.
- Carrier strength matters more than rate. Check AM Best ratings and buy from financially strong companies.
- Independent shopping beats a single carrier. We compare across all the companies above rather than pushing one product line, and that’s the whole reason we can tell you which one actually fits.
Ready to figure out which annuity mix fits your retirement plan? Give us a call at 800-712-8519 and we’ll walk through the options based on your income needs. No pressure, no sales pitch, just an honest conversation about the numbers.
