If you’re nearing retirement, you’ve probably asked this question:
Should I be using CDs, bonds, or annuities right now?
Because what worked 10–15 years ago… doesn’t always work today.
Interest rates, inflation, and market volatility have changed the game. And right now, a lot of retirees—and even high-net-worth investors—are quietly shifting how they allocate their money.
Let’s break down exactly where smart money is moving, and why.
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Why CDs and Bonds Are Starting to Fall Short
CDs and bonds have always been the “safe” part of a portfolio.
But today, they come with some real challenges:
- Interest rate risk (bonds): When rates rise, bond values can drop
- Lower income potential: Many portfolios aren’t producing the income retirees expected
- Inflation pressure: Fixed returns may not keep up with rising costs
That’s why many retirees are rethinking the traditional 60/40 portfolio, especially the bond side.
💡 Pro Tip: Safety isn’t just about avoiding losses… it’s about making sure your income actually supports your lifestyle.
👉 Want help stress-testing your current portfolio? Schedule a call with me here.
Where Smart Money Is Moving Instead
Here’s what I’m seeing right now:
A growing number of retirees are shifting part of their portfolio into annuities, especially for the income portion.
Why?
Because annuities can offer:
- Higher guaranteed income than bonds or CDs
- Contractual lifetime income
- Protection from market downturns
For example, some retirees are allocating 30-40% of their portfolio into annuities to replace bonds entirely.
The goal is simple:
👉 Turn part of your savings into a pension you can’t outlive
The Appeal of Guaranteed Lifetime Income
Let’s talk about the biggest concern retirees have:
“Will I run out of money?”
That’s where income annuities shine.
- You can create guaranteed income for life
- Payments can be joint (covering both spouses)
- Some options include death benefits for beneficiaries
In many cases, retirees can generate significantly higher income compared to traditional bond portfolios.
💡 Pro Tip: Income planning isn’t about chasing returns, it’s about replacing your paycheck.
👉 Want to see what your personal “pension” could look like? Schedule a call here.
MYGAs: The CD Alternative Most People Miss
If you like CDs, you’ll want to understand this.
MYGAs (Multi-Year Guaranteed Annuities) work similarly, but with key advantages:
- Higher interest rates (often 5–6%+)
- Tax-deferred growth (unlike CDs)
- Flexible withdrawal options (depending on the product)
In today’s market, some MYGAs are outperforming both CDs and many bonds.
That’s why many investors are using MYGAs as:
👉 A bond/CD replacement for the conservative portion of their portfolio
Index Annuities: Growth Without Market Risk
Want more growth, but still want protection?
That’s where fixed index annuities come in.
They offer:
- Upside tied to indexes like the S&P 500
- No market losses (your principal is protected)
- Long-term average returns that can outperform fixed products
Some strategies have produced upwards of 9% average returns over time, depending on structure and market conditions.
But here’s the key:
- Some years = strong growth
- Some years = 0%
- But never negative
💡 Pro Tip: Index annuities work best over 7–10+ years—not short-term.
👉 Not sure if index annuities fit your plan? Schedule a call here.
How Smart Retirees Are Structuring Their Portfolios
Here’s a simple framework I’m seeing more often:
Example allocation:
- 60% → Growth (stocks or equities)
- 40% → Income + protection (annuities instead of bonds)
That 40% might include:
- Income annuities (lifetime income)
- MYGAs (guaranteed growth)
- Index annuities (growth + protection)
The result?
👉 A portfolio designed for income, stability, and long-term growth
Conclusion
CDs, bonds, and annuities all have their place.
But right now, many retirees are realizing:
👉 Traditional “safe” assets may not be enough anymore
Annuities aren’t about replacing your entire portfolio.
They’re about:
- Securing income
- Reducing risk
- Creating peace of mind
And when used correctly, they can be one of the most powerful tools in retirement planning.
Need help with finding the best annuity for your retirement?
Click here to schedule a call with me.
On the call, I can help you:
- Determine what type of annuity is best for you
- Find the highest paying annuities for your unique situation
- Answer any other questions you may have