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May 16, 2023
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When planning for retirement, annuities can be a low-risk way to build tax-deferred savings to put toward medical bills or living expenses. There are many different annuity products, but we’ve done the research to determine which companies offer the best options for seniors.
Pro Tip: To learn how annuities work and what they can offer, check out our guide to annuities.
Fidelity has been a market leader in annuities since 1946, and the company now offers six different annuity products, which it organizes into three categories: retirement, asset protection, and income generation.
Fidelity maintains impressive financial stability scores with all rating agencies, and it’s currently worth $89.5 billion, giving annuity holders peace of mind that their annuity will pay out as advertised.
Fidelity annuities rarely include more than a few modest fees. Fidelity is well-known for its top-notch customer service and excellent resources for people facing retirement, such as the Guaranteed Income Estimator.
| Annuity type | Minimum initial investment |
|---|---|
| Fidelity personal retirement annuity | $10,000 |
| New York Life premier variable annuity | $25,000 |
| Deferred fixed annuities | $5,000 |
| Deferred income annuities | $10,000 |
| New York Life clear income fixed annuity | $50,000 |
| Immediate fixed income annuities | $10,000 |
Similar to most annuities, Fidelity includes more fees in its variable annuities than in its fixed. Fidelity’s fee rates, however, tend to be lower than other providers’. The mortality fee for Fidelity’s personal retirement annuity is 0.25 percent, for instance, much lower than average. Annual fees for Fidelity annuities range from 0.1 percent to 0.25 percent, depending on the size of your initial investment
MassMutual boasts over 200 years of experience and offers several add-on options to customize retirement income plans. The add-ons, however, aren’t free and will increase your final price tag.
With extra-strong financial stability scores from each of the insurer ratings agencies, it’s easy to feel comfortable about placing your money in MassMutual’s hands. Minimum investments for the company’s annuities range from $4,000 to $10,000.
One unique MassMutual annuity is the RetireEase annuity, a flexible-premium deferred income annuity that offers a low entry and a range of payments, eliminates annual fees, and lets you choose whether you receive payments monthly, quarterly, semi-annually, or annually.
| Annuity type | Minimum initial investment |
|---|---|
| Stable Voyage fixed deferred annuity | $10,000 |
| RetireEase Choice deferred income annuity | $10,000 |
| Odyssey Select multiyear guarantee annuity | $4,000 |
The three MassMutual annuities listed do not require annual fees. Variable annuity fees include charges spanning from 0.54 percent to 2.59 percent. The company also charges a combined fee of 1 percent to 1.3 percent for administrative, mortality, and expenses.
AgeUp offers a deferred income annuity for people over the age of 90. Backed by MassMutual Life Insurance Company, which has been in business since 1851, the AgeUp annuity is a safe investment, since the company consistently earns top ratings in financial strength evaluations from agencies such as S&P Global and Moody’s.
In contrast to savings accounts, the funds in an AgeUp annuity plan are not liquid and cannot be withdrawn until either payout commences or premiums are refunded to a beneficiary. Prices for monthly payments may range from $25 to $250, while the minimum investment ranges from $25 to $50,000, depending on the annuity.
| Annuity type | Minimum initial investment |
|---|---|
| Single life annuity | $25 |
| Fixed guaranteed growth annuity | $50,000 |
AgeUp requires no monthly fees, so you’ll have to pay only your monthly premiums, which will be between $25 and $200.
Involved in many aspects of retirement planning, Allianz Life Insurance Company is the picture of financial strength with $1.14 trillion in assets. Originally a product of the late-19th century Berlin, Allianz is the world’s largest insurance company, operating in over 50 countries.
Allianz offers 13 annuities, all fixed index or index variable plans. Some Allianz annuities require an initial investment of only $5,000, while others require investments up to $20,000. The company’s annuities are enticing because of its many options and numerous choices that include high-yield returns, but Allianz is one annuity provider that has not cut back on fees and riders — and they could add up.
| Annuity type | Minimum initial investment |
|---|---|
| Allianz Benefit Control annuity | $20,000 |
| Allianz 222 annuity | $20,000 |
| Core Income 7 annuity | $10,000 |
| Essential Income 7 annuity | $10,000 |
| Retirement Foundation ADV annuity | $10,000 |
| Allianz Accumulation Advantage annuity | $20,000 |
| Allianz Index Advantage variable annuity | $10,000 |
| Allianz Index Advantage Income variable annuity | $5,000 |
| Allianz Index Advantage Income ADV variable annuity | $5,000 |
| Allianz Index Advantage NF variable annuity | $10,000 |
| Allianz Index Advantage ADV variable annuity | $10,000 |
Allianz’s fixed index annuities do not have annual fees, but its other annuity products are peppered with fees. Its variable annual fee is 1.25 percent. There are also surrender fees for early withdrawals past 10 percent, which decrease annually for seven years, taking the extra fee from 8.5 percent to 3 percent. After that period passes, all withdrawals can be made fee-free. A death benefit fee of 0.2 percent and a variable option annual fee between 0.64 percent and 0.72 percent are a couple other fees to expect when considering Allianz annuities.
New York Life Insurance Company is one of America’s largest insurance providers, with over 170 years of service and $271.7 billion in managed assets.
The company consistently maintains high scores with the most reputable raters, including an A++ from AM Best and AAA from Fitch. As of 2022, New York Life offers nine annuity options — a mix of fixed and variable choices. The minimum investment for these annuities is $5,000, but reaches as high as $50,000.
The company also offers New York Life long-term care insurance.
| Annuity type | Minimum initial investment |
|---|---|
| Index FlexVariable annuity | $10,000 |
| New York Life premier variable annuity | $5,000 |
| Guaranteed lifetime income annuity | $10,000 |
| Guaranteed future income annuity | $10,000 |
| Guaranteed period income annuity | $10,000 |
| Clear income fixed annuity | $50,000 |
| Secure term choice fixed annuity | $5,000 |
| Secure term MVA fixed annuity | $5,000 |
| Secure term fixed annuity | $5,000 |
New York Life’s annual fees range from $0 to $40, but all annual fees are waived once your account reaches $100,000. Fees seem to be everywhere with New York Life. If you find an annuity you like, make sure to incorporate the fees into your long-term calculations before making a final decision. There are various rider fees of up to 1.3 percent, as well as mortality, expense, and administrative fees ranging from 1 percent to 1.3 percent.
When evaluating which companies offer the best annuities for seniors, we looked for:
As you search for the right annuity, remember to evaluate each product for financial stability, customer service, return rates, fees, and minimum investment amounts. When chosen well, an annuity can help provide the income needed for medical, living, and long-term care expenses.
To learn more about the best ways to save for retirement, read our helpful guides.
Immediate annuities are an excellent choice for seniors who need to start receiving income installments as soon as they can make a lump-sum payment. Deferred annuities, on the other hand, are also a strong option for people prepared to postpone receiving income payments.
In terms of low costs, AgeUp is a great annuity option for seniors. If you’re looking for larger payouts, however, then Fidelity and MassMutual are great choices.
Canvas Annuity currently offers a guaranteed return rate of 4.6 percent for seven years. At the moment, this is the highest long-term guaranteed return rate.
