If you’re approaching retirement, you’ve probably heard this question before:
Is an annuity better than a bond ladder for retirement income?
The short answer?
It’s not really either/or. It’s about which strategy fits your goals, lifestyle, and tolerance for complexity.
Let’s break this down in plain English.
Annuities vs. Bond Ladders: The Big Picture
Both annuities and bond ladders can work well in retirement.
They just solve different problems.
- Bond ladders offer liquidity and control.
- Annuities offer simplicity and lifetime income guarantees.
The “better” option depends on what you value most in retirement.
💡 Pro Tip: Many retirees actually use both — just for different purposes.
Why Many Retirees Favor Annuities for Income
If your main goal is high, predictable income for life, annuities often shine.
Once an income annuity is set up:
- Income is contractual
- Payments never decrease
- Money shows up automatically in your bank account
- No rollovers, reinvestments, or monitoring required
This matters more as we age.
Managing investments gets harder — especially for a spouse who may need to take over later.
👉 Want help finding the best income annuity options? Schedule a call and see what’s available today.
Where Bond Ladders Still Make Sense
Bond ladders are not bad strategies at all.
They can be a great fit if you:
- Want maximum liquidity
- Don’t want surrender charges
- Like staying hands-on with your money
- Are comfortable rolling bonds as they mature
The tradeoff?
You (or your spouse) must manage the ladder forever — reinvesting, tracking maturity dates, and keeping the strategy running.
That’s fine in your 60s.
It’s not always appealing in your late 70s or 80s.
Using MYGAs as a “Bond Ladder Alternative”
Some retirees use MYGAs (Multi-Year Guaranteed Annuities) instead of bonds.
Think of MYGAs as:
- The annuity version of a CD
- Fixed rates for 3, 5, 7, or 10 years
- Often higher rates than CDs
- Principal protection with predictable growth
You can even ladder MYGAs:
- Buy a 5-year, 7-year, and 10-year MYGA
- Stagger maturity dates
- Roll them over when they mature
This approach works well for people who want:
- Safety
- Growth
- Legacy planning
- Minimal market risk
👉 You can see current MYGA rates anytime here.
When Lifetime Income Annuities Really Stand Out
If your focus is income — not legacy — annuities can be extremely powerful.
With income annuities:
- You can stack income on top of Social Security and pensions
- The income is guaranteed for life (single or joint)
- You don’t have to worry about running out of money
This often allows retirees to:
- Cover core expenses with guaranteed income
- Leave remaining assets invested for growth
- Add additional annuities later to fight inflation
That “set it and forget it” simplicity is why many retirees choose annuities.
The Best Strategy? Often a Combination
There’s no single “perfect” solution.
Many successful retirement plans use:
- Annuities for guaranteed lifetime income
- Market investments for growth
- MYGAs or bonds for safety and legacy
This gives you:
- Income you can’t outlive
- Growth potential
- Less stress and less management
👉 Want to see how this might work for you? Book a Zoom call and walk through real numbers using my calculators.
Conclusion
Annuities aren’t automatically better than bond ladders.
Bond ladders aren’t automatically safer than annuities.
The real question is:
- Do you want more control and maintenance?
- Or more income and simplicity?
If you value guaranteed income, ease, and peace of mind — annuities often win.
If you value liquidity and hands-on management — bonds or MYGAs may fit better.
Either way, the right answer is personal.
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