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Straight-talk annuity articles

Clear, no-hype articles that focus on guarantees, liquidity, and income jobs an annuity should solve. Each post links to calculators and consultations so you can act, not just read.

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Guarantees 101
2024-11-126 min readbenefitsofannuities.com/articles#are-annuities-guaranteed

Are annuities guaranteed? What consumers get wrong about guarantees

A guarantee is about contractual income, not stock-market dreams. Here’s how to read the fine print and ask sharper questions.

Guarantees
Fixed annuities

Key takeaways

  • Guarantees come from the contract and the carrier’s claims-paying ability, not hypothetical illustrations.
  • Index annuities cap upside to deliver principal protection; they are not equity substitutes.
  • Ask for the guarantee in writing with worst-case numbers so expectations stay realistic.

“The guarantee is the contractual income stream—everything else is marketing fluff.”

What a real annuity guarantee actually is

Guarantees are contractual, not hypothetical. In practice, that means: a fixed payment schedule on a Single Premium Immediate Annuity (SPIA) or Deferred Income Annuity (DIA), a stated rate for a MYGA, or principal protection plus caps on an indexed contract. If it is not in the policy, it is not guaranteed.

What is not guaranteed

The cleanest test: could you point to the exact policy page that backs the promise? If not, treat it as sales talk.

  • Illustrated index crediting rates beyond the stated cap or participation rate.
  • Future dividend scales on variable contracts.
  • Any verbal promise about market-like upside with no downside.

How to pressure-test a guarantee

Bringing these answers to your call with Makonnen keeps the conversation grounded in numbers—not narratives.

  • Request the contractual floor (worst-case) in writing for each option.
  • Compare payout quotes across at least three A-rated carriers.
  • Ask how the carrier has changed caps/participation rates over the last five years.
  • Confirm free-look periods and surrender schedules in advance.
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Tax deferral
2024-10-045 min readbenefitsofannuities.com/articles#tax-deferral-vs-liquidity

Tax-deferral vs. liquidity: setting expectations before you sign

Tax deferral compounds quietly until liquidity assumptions are wrong. Learn to balance growth, withdrawals, and surrender realities.

Tax-deferred growth
Planning

Key takeaways

  • Deferred contracts reward patience; short holding periods often erase the benefit.
  • Ask for surrender schedules and free-withdrawal features in plain English.
  • Model taxes, inflation, and contribution timing before choosing a contract.

“Tax deferral is powerful, but only when paired with a withdrawal plan you can actually stick to.”

Why liquidity conversations matter

Liquidity—not yield—is what surprises buyers. If you might need the cash in two years, consider a MYGA with a shorter term or a non-annuity solution. If you can keep funds parked, tax deferral compounds at every crediting anniversary.

Variables to model before buying

Use the calculators below to pressure-test whether the surrender period aligns with your cash needs.

  • Assumed growth rate and crediting method (fixed, indexed, or blended).
  • Contribution cadence: monthly, quarterly, or annual lump sums.
  • Free-withdrawal percentages and any market value adjustments.
  • Tax bracket now vs. expected tax bracket in retirement.

Questions to bring to Makonnen

Use these prompts to keep the plan realistic and transparent.

  • How does this carrier handle rate renewals after the guarantee period?
  • What happens if I take a partial withdrawal in year two?
  • Can we ladder multiple contracts to keep liquidity optionality?
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Income planning
2024-09-157 min readbenefitsofannuities.com/articles#income-contract-fit

SPIA vs. MYGA: picking the right contract for predictable income

Single-premium immediate annuities and multi-year guaranteed annuities solve different problems. Match the contract to the job.

Income planning
SPIA
MYGA

Key takeaways

  • SPIAs are for turning a lump sum into a paycheck now; MYGAs are for growing safely until you’re ready.
  • Health, joint-life needs, and COLA riders matter more than chasing the highest teaser rate.
  • Get apples-to-apples quotes across carriers with the same payout start date and rider set.

“Choose the contract that solves the job: immediate income vs. guaranteed accumulation.”

When a SPIA shines

SPIAs align to a simple rule: use an annuity to solve for income, not to chase returns.

  • You want income to start within 12 months.
  • You prefer irrevocable guarantees over market participation.
  • You need joint-life or period-certain protection for a spouse.

When a MYGA is the better fit

A MYGA can act as a parking spot while you finalize retirement dates or Social Security timing.

  • You want a CD-like rate with tax deferral and a known surrender period.
  • You plan to annuitize or roll funds later once you choose a payout strategy.
  • You want to ladder maturities to keep cash flow optional.

How to compare offers

Bring these side-by-side numbers to Makonnen to decide which contract solves your specific income job.

  • Match guarantee periods and rider selections before comparing rates.
  • Check the carrier’s ratings and how often they adjust renewal rates.
  • Request both the guaranteed and current assumption quotes in writing.
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