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Which Annuity is Best? Index Annuity vs Variable Annuity vs None at All

Here at AnnuityGator.com we’re often asked, “which annuity is best?”

Truth is, it really depends on specifically what you’re looking for, as well as what works best within your specific financial plan. Anyone who says otherwise most likely has an ax to grind – or is trying really hard to sell you something.

That said, certain financial products/strategies really are better than others at realizing specific objectives. Below, is a table that helps illustrate this pretty well:

[emaillocker]

FeatureFixed Indexed AnnuityVariable AnnuityNon Annuity
Highest Minimum Guaranteed Return
Highest Potential Return
Highest Income Guarantee (via riders)
Lowest Cost
Most Flexibility
Most Potential for Loss

What we did here is looked at various things that might be important to an investor, and then identified with a simple check mark the very general investment strategy/product that works best. By no means is this exhaustive, but it does provide some key takeaways when considering the options you have as an investor.

So What is the Best Annuity?

As you can see from the table, if you’re looking for:

  • The highest minimum guaranteed return
  • The highest guaranteed income for life

Then there’s probably a fixed or fixed indexed annuity that will work best. Variable annuities have these features too, they just don’t offer quite as high guarantees as fixed type annuities at this time. The main reason for this is variable annuities do offer (potentially) substantially more upside, but usually also can have much larger fees.

The key is knowing which annuity will work best for you; or, if you should be using an annuity at all. It’s important investors know that not all annuities work best in all situations. Some will work best if you’re older, others if you’re younger, others if you’re single, etc, etc, etc. The only way to know is to have all of them tested for your specific goals so you can see the results in advance on how they will work for you.

Sounds simple enough, but most annuity salespeople don’t really work that way.

While we can’t promise anything here at Annuity Gator – if you have questions about which annuity would work best for you, or if you should have an annuity at all – just use our free contact form and we’ll do our very best to at least point you in the right direction.

For Some People – You’re Better off with no Annuity at All

The table above also helps illustrate that depending on what you’re looking for, maybe an annuity is not the best solution at all.  If it’s important for you to:

  • Keep costs as low as possible
  • Keep investment flexible and able to change as markets change
  • Get maximum returns
  • Don’t mind taking more risk than annuities

Well, then non-annuity solutions might be a good fit.

The really important thing for investors to understand is pretty simple: If you want guarantees and safety, then annuities are probably a solution worth looking into. Other than CDs, non-annuity solutions (think stocks, bonds, real estate, commodities, funds, etc) always have more potential – but always have a risk – including the risk of losing invested principal.

In the end, this is why for many investors some combination of fixed annuities and non-annuities works quite well. They use guaranteed solutions that help make sure all the core expenses of retirement are guaranteed and then use non-annuity solutions for the balance. In some ways, this is what variable annuities try to do all in one – but in our opinion, often fail to do because of the rather high expenses required to do so.

Have Questions – Wonder What Solution is Best for You?

Feel welcome to reach out. We do our best to respond to questions via email within 24 hours, and while we can’t guarantee we’ll be able to help everyone, we do our best to at least get you the answers you need so you don’t make a long term commitment to a complicated financial product you might later regret. Just use this form to ask a confidential question to the Annuity Gator team: or, feel free to leave comments below the post.

Have an Annuity You’d Like to See Reviewed?

No problem, our team of highly trained annuity geeks can jump to it! Click here to get started and we’ll do our best to get it online as soon as possible.

Ask Us a Question

If you ever need to ask specific questions or need some one-on-one guidance (for free and with no pressure, of course), feel welcome to reach out by clicking here. We’d love to hear from you.

Best,

Annuity Gator.

Which Annuity is Best? Index Annuity vs Variable Annuity vs None at All

 

15 Comments
  • john
    10:13 PM, 13 January 2014

    My Chase broker offered me a variable annuity 5% guarantee with a 5 year term. He said the company is AA+. This sounded alittle too good to be right . Fees total were 2.65%. What is your thoughts on this. John

    • Annuity Gator
      12:58 AM, 17 May 2017

      Hi John – Thank you for your message. We would be happy to discuss the variable annuity that your broker offered to you. At your convenience, please provide the name and issuer of the annuity, and we can obtain the additional information that you need. If you’d like to reach out to us directly with any additional questions or concerns, please feel free to do so via phone at (888) 440-2468. Best. – Annuity Gator Team

    • Annuity Gator
      2:40 PM, 23 May 2017

      Hi John – Thank you for your message. We would be happy to go over this with you. In order to provide you with the best advice, we would need to get a bit more information from you. Rather than emailing sensitive details back and forth, though, it would be best to chat via phone. Please feel free to reach out to us directly, toll-free, at (888) 440-2468. We look forward to speaking with you. Best. -AnnuityGator Team

  • Robert Pitchford
    3:21 PM, 6 February 2014

    I am really impressed with your presentation particularly concerning Security Benefits Fixed Index Annuity. I questioned the accuracy of statements made to me and your great presentation confirmed my concerns. I tried to access your Annuity book but couldn’t access it unless it was the one I watched earlier about SB. If not would appreciate the e-book. Thank you!

    • Annuity Gator
      11:06 AM, 3 July 2017

      Hi Robert – Thank you for your message. We have recently been in the process of updating and adding to our AnnuityGator.com website, so the e-book should be easily accessible now. If you do happen to have any additional issues with it, though, please feel free to reach out to us directly via phone, toll-free, at (888) 440-2468. Best. – Annuity Gator Team

  • Henry McCown
    7:12 PM, 14 February 2014

    Jason: I cannot get access to your Annuity E-Book through the links on your site. None of them seem to be hot. Can you give me another link? Thank you!

    • Annuity Gator
      11:04 AM, 3 July 2017

      Hi Henry – Thank you for your message. We have been in the process of updating (and adding to) our AnnuityGator.com website, so you should now be able to download the e-book. Please let us know if you still have issues with it, though, by contacting us directly at (888) 440-2468. Best. – Annuity Gator Team

  • tonyquintieri
    6:23 PM, 29 March 2014

    I could not get into your site there was no place to enter. I wanted to check on my master dex Xten accc.

    • Annuity Gator
      10:46 AM, 12 July 2017

      Hi Tony – Thank you for your message. We can assist you in getting into the site. Please contact us at (888) 440-2468 and one of our Annuity Gator team members can walk you through. Thanks, we look forward to chatting with you. Best. – Annuity Gator Team

  • Ray Bobo
    1:37 PM, 12 June 2014

    In the discussion above in the paragraph below the chart that begins “The key is” you say, “if your older, others if your younger, others if your single…” Do you mean to say, “if you’re older, others if you’re younger, others if you’re single . . .”? Otherwise, I don’t get it. I guess that goes to show that math geeks are not necessarily grammar geeks, huh?

    • Annuity Gator
      1:47 PM, 12 June 2014

      Hi Ray,

      Thanks for reaching out. I’ve re-read the text and can’t find what you’re trying to point out? And yes, sometimes math geeks aren’t so good at grammar! 😉

      – Annuity Gator

  • LuAnn
    9:15 AM, 13 June 2014

    I am considering the American Equity Bonus Gold Annuity, but now I’m not so sure after reading your review. I’m working with an advisor from my credit union & I think he may not have a clear understanding of the product as he showed me he has a policy there & he thinks he earned 9% last year. I want to put a portion of our tax deferred savings into an annuity for safety & leave the rest in mutual funds. We’re hoping to retire in 8-10 years at 60 or 62. I know I won’t earn as much as the market, but was hoping for the reasonable rates & safety that he stated. Is there a better choice for me? My internet isn’t the fastest so I didn’t watch the video on your review.

    • Annuity Gator
      11:33 AM, 7 April 2017

      Hi LuAnn – Thank you for your message. We would be happy to walk you through some scenarios using the American Equity Bonus Gold annuity, as well as other alternatives that may work better for you. In order to do so, though, we would need to get a bit more information from you. Rather than passing emails with personal information back and forth, we recommend a phone call instead. You can contact us directly, toll-free, at (888) 440-2468. We look forward to talking with you. Best. – Annuity Gator Team

  • B
    6:51 PM, 7 November 2015

    You have spelling errors: you should use you’re (you are) instead of your in the following text:

    “Some will work best if your (SHOULD BE YOU ARE) older, others if your (SHOULD BE YOU ARE) younger, others if your (SHOULD BE YOU ARE) single, etc, etc, etc. The only way to know is to have all of them tested for your (CORRECT HERE!) specific goals so you can see the results in advance on how they will work for you.”

    I believe this is what the comment above was talking about.

    I stopped reading after seeing these errors.

    • Annuity Gator
      10:29 AM, 3 July 2017

      Hello – Thank you for your message. We are always open to information that can help us better our website and information – including spelling / grammar errors. We will get on this and update the report in order to clean up these errors and will then re-post. So, be sure to check back shortly for the updated information. Best. – Annuity Gator Team

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