6-Year Fixed Annuity Rates
If you're nearing retirement and looking to boost your nest egg, a 6-year fixed annuity could be a good option. It offers low-risk, guaranteed returns that you can calculate upfront and may be customizable with riders to fit your unique goals.
- Written by Anna Baluch
- Edited By
Michael Santiago, CRPC™
Michael Santiago, CRPC™
Senior Financial Editor
Michael Santiago, a senior financial editor, joined RetireGuide in 2023. With over 10 years of professional writing and editing experience, he brings a wealth of expertise in creating content for diverse industries, including travel and healthcare. Having traveled to more than 40 countries across five continents and lived in Europe and Asia for several years, Michael's global perspective enriches his work. He combines his strong writing skills, editorial judgment and passion for crafting accurate and engrossing content to enhance the user experience on RetireGuide.
Read More- Published: December 11, 2024
- Updated: December 12, 2024
- 5 min read time
- This page features 4 Cited Research Articles
- With a 6-year fixed annuity, you’ll receive a guaranteed rate of return after the 6 year term comes to an end.
- This type of product is considered low-risk but usually comes with high fees and inflation concerns.
- If you’re in the market for a 6-year fixed annuity, shop around and compare all your options from different companies.
What is a 6-Year Fixed Annuity?
Typically offered by insurers and other financial service companies, a 6-year fixed annuity guarantees a minimum interest rate, meaning you can calculate your returns in advance. Even when there are fluctuations in the market, you’ll earn the minimum income promised to you in your contract. Compared to variable annuities with fluctuating, unpredictable interest rates, fixed annuities are less risky.
How Does a 6-Year Fixed Annuity Work?
Once you choose a 6-year fixed annuity, you can fund it with one lump sum or a number of payments. Regardless, you’ll contribute to your account as it grows through a set interest rate. You may receive your annuity income right away or years from now, when you retire. It’s up to you to select a timeline that accommodates your financial situation and future goals. Note that interest rates for 6-year fixed annuities depend on the market as well as the financial strength ratings of the providers. As a comparison, a 6-year annuity is tax-deferred, meaning you pay taxes upon withdrawal, unlike a 6-year certificate of deposit (CD), which is more suited for short-term savings needs.
Learn More About Your Annuity Options
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Current 6-Year Fixed Annuity Rates
The Federal Reserve helps determine federal funds rates and in turn, has an effect on annuity rates. When federal funds rates go up, annuity providers usually increase their rates as well. On the contrary, lower federal fund rates typically result in less competitive rates on annuity products.
Here’s a look at current 6-year fixed annuity rates from reputable providers:
| Annuity Provider/Insurer | Product Name | Current Rate for a 6-Year Fixed Annuity |
|---|---|---|
| EquiTrust | Certainty Select | 5.25% |
| Farm Bureau Financial Services | Simple Select Fixed Annuity | 3.70% |
| CoreBridge Financial | American Pathway Vision MYG | 4.15% |
| Penn Mutual | Guaranteed Foundation Fixed Annuity | 4.00% |
Advantages and Risks of a 6-Year Fixed Annuity
- Guaranteed returns: With a 6-year fixed annuity, you’ll receive a guaranteed principal and interest rate. This product may withstand various market conditions.
- Easier budgeting: Predictable payments can simplify the way you budget for retirement. You won’t face any unwanted financial surprises.
- Tax-deferred growth: Annuities can also make it easier to plan for your taxes. You’ll be subject to income tax when you withdraw funds, likely when you’re in a lower tax bracket.
- Inflation risk: Inflation may be an issue in the long term as interest may not keep up with the increasing cost of living. A 6-year fixed annuity may be less valuable 6 years from now.
- Surrender charges: If you decide to cash out your annuity early, some companies will charge a surrender fee. Surrender fees are usually a percentage of the amount you withdraw.
- Limited growth potential: There’s a cap on how much you can earn with a 6-year fixed annuity. You might receive higher returns with a 401(k) or another investment product.
*Ad: Clicking will take you to our partner Annuity.org.
How to Compare and Choose the Best 6-Year Fixed Annuity
- Interest rates
- The interest rate will allow you to calculate your returns in advance. A higher rate means more money in your pocket when the 6-year term expires.
- Fees
- Pay attention to the various fees in potential annuity contracts. These may include surrender charges, commissions and application fees.
- Financial strength
- Look up financial strength ratings from reputable third-party sources like Moody’s and AM Best. Good to excellent ratings are ideal.
- Riders
- Some companies offer riders and add-ons so you can customize your policy. You may want a disability rider or a death benefit rider, for example.
Is a 6-Year Fixed Annuity Right for You?
If you’re close to retiring and prefer a risk-free strategy to boost your nest egg, a 6-year fixed annuity should be on your radar. You won’t need to take on a great deal of risk or worry about losing your principal. A 6-year annuity is particularly beneficial if you believe you’ll be in a lower tax bracket when you retire and can find a product with a competitive rate and customizable options.
Frequently Asked Questions About 6-Year Fixed Annuities
Editor Norah Layne contributed to this article.
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- Published in AP News, Credit Karma, Fox Business, U.S. Chamber, Point.com, Newsweek, Insurify and Forbes
- Over a decade of professional writing experience in finance
- MBA with a focus on marketing from Roosevelt University
4 Cited Research Articles
- EquiTrust. (2024, November 5). EquiTrust Agent Gateway. Retrieved from https://agents.equitrust.com/products/interest-rates/certainty-select-myga/?Tab=Current
- Farm Bureau Financial Services. (2024, November 1). Annuity Interest Rates. Retrieved from https://www.fbfs.com/financial-services/investments/annuities/interest-rates
- Penn Mutual. (2024, November 1). Guaranteed Foundation Fixed Annuity. Retrieved from https://gateway.pennmutual.com/products-performance/annuities/guaranteed-foundation-fixed-annuity
- CoreBridge Financial. (2024, August 12). American Pathway Solutions MYG Annuity. Retrieved from https://connext.corebridgefinancial.com/life/connext-fdm/download/
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