If I wanted zero market stress in retirement, I would start by deciding how much of my financial life I wanted tied to the stock market. Then I would compare annuity contracts designed for lifetime income, guaranteed fixed growth, or index-linked growth with protection from market losses.
I like the stock market, and I use market-based investments myself. But as I get older, I understand the desire to protect what I have accumulated and stop checking my phone every time the market moves.
Retirement should be a time to enjoy your money and your income. Here is how I would approach building a plan that makes that possible.
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1. Decide What I Want My Retirement Money to Do
Before I compare annuities, I want to answer a simple question: What job does this money need to do?
For some people, the priority is a paycheck that lasts as long as they live. For others, it is earning a predictable interest rate or having growth potential without directly exposing their principal to stock market losses.
I would separate those goals into three categories:
- Lifetime income: Contractual payments designed to continue for life.
- Fixed growth: A guaranteed interest rate for a specified period.
- Index-linked growth: Interest based on an index formula, with protection from negative index returns under the contract.
I sell annuities, and that is how I make money. But not everyone needs one, and the right contract depends on what you want to accomplish.
When I talk about zero market stress, I mean reducing the worry caused by market declines. That does not make an annuity free of every risk: guarantees depend on the insurer, and liquidity restrictions, inflation, and contract terms still matter.
2. Use Lifetime Income to Create a Retirement Paycheck
If my first priority were income, I would compare contracts based on the payments they provide for my specific situation.
In the video, I use an example where I am 55, my wife is four years younger, and we place $750,000 into an annuity. We plan to begin income in 12 years, when I turn 67, alongside Social Security.
The annual income examples shown include approximately:
- Clear Spring: $127,000.
- Midland: $120,000.
- Athene: $118,000.
- Nationwide: $116,000.
- Prudential: $98,000.
Those are examples from the video, not current quotes or payouts available to everyone. Ages, income start dates, coverage options, and contract terms affect the results.
When I change the income start age to 70, Athene becomes the highest-paying option shown, at approximately $138,000 annually. That is why I compare contracts using the actual date someone wants income to begin.
Lifetime income and account value are different things. In the example above, I explain that the account balance could eventually be depleted after withdrawals begin, while qualifying lifetime payments continue under the contract.
I am buying that contract for its income promise. I am not assuming the original balance will remain untouched forever.
Personally, I might use a portion of my portfolio for lifetime income and invest other money in riskier assets. Having that income foundation can help me feel more comfortable with the rest of my investments.
👉 If you are looking to purchase an annuity, schedule a call with me through my website to compare income options for your situation.
3. Consider a MYGA for Guaranteed Fixed Growth
A multi-year guaranteed annuity, or MYGA, provides a fixed interest rate for a specified term. It is similar to a CD in its predictable interest structure, although it is an insurance contract with different protections and withdrawal rules.
In the video, I compare several terms, including five, seven, and ten years. Some displayed rates require a minimum deposit of $100,000, so the advertised rate alone does not tell the whole story.
The questions I would ask are straightforward:
- How long is the rate guaranteed?
- Does the interest compound?
- Can I withdraw interest or part of the balance during the term?
- What happens when the guarantee period ends?
- Am I comfortable with the insurer’s financial strength?
One example in the video above offers a 6.25% compounded rate for ten years. I also discuss an interest-withdrawal version at a slightly lower rate of 6.15%.
The trade-off is access. The higher-rate version discussed does not provide the same withdrawal flexibility, so I would not choose it simply because its rate looks better.
The best fixed annuity for me is one whose term and withdrawal rules fit how I plan to use the money. Rates shown in the video are examples and may no longer be available.
4. Compare Simple Interest With Compound Interest
A higher advertised interest rate does not always produce a higher ending balance.
With simple interest, earnings are calculated on the original principal. For example, $100,000 earning 6% simple interest produces $6,000 each year, but those earnings do not themselves earn interest under that arrangement.
With compound interest, credited earnings also earn interest. That difference becomes more meaningful the longer I leave the money alone.
In the video, I show a five-year simple-interest example using $750,000 at 6.5%. It generates $48,750 annually, or an ending balance of $993,750 if all five years of interest remain in the contract without compounding.
That ending balance represents an annualized yield of approximately 5.79%. This is why I look at both the base rate and the yield to surrender in my calculator.
If I want to live on the interest, a simple-interest contract could make sense when its withdrawal provisions allow it. If I want to leave everything untouched, I would compare the actual ending values against compounded alternatives.
💡 Pro Tip: Check the withdrawal allowance before planning to spend the interest. Taking more than the interest earned reduces principal, even when the withdrawal is within a penalty-free allowance.
5. Evaluate Fixed Indexed Annuities for Growth Potential
If I wanted growth potential without directly investing that money in the stock market, I would compare fixed indexed annuities.
These contracts credit interest using a formula tied to an index, such as the S&P 500. I am not buying the index itself, and I should not expect to receive its full investment return.
The growth pattern can look more like steps than a roller coaster. There may be periods with no credited interest, followed by periods when the contract credits gains.
In the video, I use a Securian example showing a hypothetical annual effective return of approximately 9.25%. That is an illustration based on historical performance and assumptions, not a guaranteed return or a forecast.
I would pay particular attention to two crediting features:
- Participation rate: The percentage of an index gain used to calculate credited interest.
- Cap rate: The maximum interest credited for the applicable period under a capped strategy.
For example, the video shows a 57% participation rate and a separate strategy with an 11.2% cap. Using a simplified 12% index gain, 57% participation produces 6.84%, while a strategy crediting the full gain up to that cap would produce 11.2%.
In a much stronger period, an uncapped participation strategy could do better. Which strategy wins depends on the index result and the contract’s calculation rules.
If I did not want to choose just one, I might split the allocation between the participation and capped strategies. A 50/50 allocation is one approach I discuss, although it does not guarantee the best result.
6. Look Beyond the Starting Rate Before Choosing a Carrier
For indexed growth, I care about what happens after the first crediting period.
A contract can look attractive when it starts, but future growth potential may change if the insurer lowers its cap or participation rate. That is why I place so much emphasis on renewal rate history.
I work with more than 70 carriers, but in the video above I explain that I recommend a much smaller group for indexed growth. I want a carrier whose renewal practices give me greater confidence in the strategy, while recognizing that past practices do not guarantee future rates.
I also generally prefer familiar indexes such as the S&P 500 over newer indexes with eye-catching participation rates. A higher participation percentage does not automatically mean better growth when the underlying indexes work differently.
An excellent company can be strong in one product category without being my preferred choice for another. I would choose based on the contract’s purpose, financial strength, renewal history, and terms, rather than the biggest starting number or the highest commission.
👉 Want help comparing an annuity for indexed growth? Schedule a call if you are considering a purchase.
7. Build a Plan That Lets Me Enjoy Retirement
If I wanted less market stress, I would match each portion of my retirement savings to a clear purpose. Lifetime income, fixed growth, and index-linked growth solve different problems.
I would use my calculators to compare income payouts and fixed rates, then look more closely at the contracts that fit my goals. For indexed growth strategies, I would compare the available options individually because there are too many variations to treat them as interchangeable.
You do not need to schedule a call just to ask a question. You can use my tools, leave a comment on the video, and learn at your own pace.
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