Best Annuity for Real Estate Agents (2026)
TL;DR: Realtors don't have a steady paycheck, which makes traditional retirement planning awkward. A SEP-IRA or Solo 401(k) catches each big commission year; a non-qualified MYGA with top-up flexibility captures overflow without locking in an annual contribution schedule. The key principle: build a system that can absorb a $200K month and survive a $20K month. Treat commission income as a series of windfalls, not a salary.
Why your situation is different
You don't get a W-2. You don't have an employer-sponsored 401(k). You have Schedule C income that swings 10x year over year, and the tax bill that comes with each closing. Your retirement plan needs to:
- Capture money in good years without forcing contributions in bad years
- Generate predictable income at retirement despite a lifetime of unpredictability
- Stay tax-efficient when you might earn $400K one year and $80K the next
SEP-IRA vs Solo 401(k): which fits a realtor
Both are designed for self-employed earners. The differences matter at your income level:
| Feature | SEP-IRA | Solo 401(k) |
|---|---|---|
| 2026 contribution limit | 25% of net SE income, up to $70K | $23K employee + 25% employer, up to $70K (+$7.5K catchup at 50+) |
| Roth option | No | Yes (Roth Solo 401(k)) |
| Loan provision | No | Yes (up to $50K) |
| Admin complexity | Minimal | Annual Form 5500-EZ if balance > $250K |
| Best for | Simple, max contribution | Highest contribution at moderate SE income; Roth bucket |
For a realtor doing $150K-$250K of net SE income, the Solo 401(k) usually beats SEP because the $23K employee piece can be made regardless of income, then layered with the employer-side contribution as cash flow allows.
For a realtor doing $500K+, both max out at $70K, so SEP is the simpler choice.
The MYGA top-up rule (and why it suits commission income)
Some MYGA contracts allow additional deposits during a defined "deposit window" (often the first 30, 60, or 90 days). After that window, no additional deposits accepted.
For a realtor: open the MYGA after a big closing (say, $80K commission), fund it with $50K, and use the 60 day deposit window to add another $30K when the next closing hits. Each deposit gets the rate locked at the contract date. This is rarer at the top of the shelf in 2026 but still available from several A-rated carriers.
If you can't find a top-up MYGA at the rate you want, the alternative is just to open multiple MYGAs at different points in the year — one per big closing. Each becomes its own contract, its own rate, its own maturity.
Non-qualified vs qualified: where to place the dollars
You'll have both kinds of money at retirement:
- Qualified money (SEP-IRA, Solo 401(k)): pre-tax contributions, tax-deferred growth, taxed as ordinary income on withdrawal. RMDs at 73.
- Non-qualified money (taxable brokerage, savings, non-qualified MYGA): after-tax dollars, growth taxed (or deferred inside a non-qualified MYGA), basis returns tax-free.
MYGAs work in both. Inside qualified, the tax-deferral is redundant (the IRA wrapper already provides it) but the rate guarantee is the actual value. Outside qualified (non-qualified MYGA), the tax-deferral is real and meaningful — you defer 1099 interest income until distribution.
Top 3 MYGA carriers writing for realtors in 2026
- Athene — AM Best A+. 5-10 year MYGAs, some products allow modest top-up windows.
- Sentinel Security Life — AM Best A-. Often top of the 3-5 year shelf, sometimes with longer flexible deposit windows.
- Oceanview Life — AM Best A-. Newer carrier, competitive rates, deposit windows on some product series.
Common mistakes realtors make in retirement planning
- Spending the good year and not funding the SEP. If you don't contribute in a $250K year, you can't catch up later. Sweep a fixed percentage from every closing.
- Not making quarterly estimated tax payments. Realtors get hammered at filing time. Use a separate "tax escrow" account from every commission.
- Carrying a small Solo 401(k) balance and not filing Form 5500-EZ when required. Once your balance crosses $250K, annual filing is required. Penalties for missed filings are steep.
- Buying a variable annuity from a brokerage rep in a high-commission year. 2-3% fees on a tax-deferred annuity inside a non-qualified account is almost always worse than a simple MYGA at the same time.
- Failing to convert SEP to Roth in slow years. A $60K Schedule C year is the perfect Roth conversion year. Convert $40-60K at 22% bracket; over 10 years that adds up to a meaningful Roth bucket.
Worked example: $480,000 net SE income realtor, age 52
Karen, 52, agent for 17 years. 2025 net SE income: $480K (good year). 2024: $190K. 2023: $340K. SEP-IRA balance: $520K. Cash in business checking: $130K.
2025 plan:
- Solo 401(k) employee: $23K + $7.5K catchup = $30.5K (pre-tax)
- Solo 401(k) employer: up to ~$70K max minus the employee piece. ~$39.5K employer-side.
- Total Solo 401(k) for 2025: ~$70K
- Backdoor Roth IRA: $8K (after-tax to Roth, $1K catchup at 50+)
- HSA if she has HDHP: ~$5K
Remaining cash after retirement contributions, taxes, lifestyle: ~$120K of free cash.
Place $80K into a 5 year non-qualified MYGA at 5.50% (rates outside qualified are slightly lower because no IRA bonus). Keep $40K in HYSA for buffer.
Inside the SEP, allocate the new $39.5K plus existing balance: split between 5 yr MYGA (~$200K), 7 yr MYGA (~$150K), index fund (~$200K).
Year-over-year: she may not max next year if income drops. That's fine — the structure absorbs variance.
Related reading
- Best annuity for small business owner exit
- Best annuity for dentists selling practice
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- Non-qualified annuity tax explained
- How much does a $100K annuity pay per month?
Frequently Asked Questions
Can I contribute to both a SEP and a Solo 401(k) in the same year?
Generally no, not in the same business. You can have a SEP from one business and a Solo 401(k) from another, but most realtors only have one Schedule C, so pick one.
What's a defined benefit plan and could I use one as a realtor?
Yes, if you have very high consistent income ($300K+) and want to shelter much more than $70K/year. DB plans for solo earners can shelter $200K-$300K annually depending on age and income. Setup cost is real (~$2-3K/year administrator).
Does a realtor S-corp change the SEP / Solo 401(k) math?
Yes. With an S-corp, the contribution base is your W-2 salary (not the full pass-through). You set your own salary, so plan it together with retirement contributions.
Can I roll old IRAs into my Solo 401(k)?
Yes. Useful if you want to do a backdoor Roth without the pro-rata tangle — moving old IRAs into a Solo 401(k) gets them off the IRA aggregation rule.
Should I buy a SPIA at retirement or just live off MYGA interest?
Depends on whether you want longevity insurance. A SPIA pays for life; if you live to 95 it keeps paying. A MYGA matures and you have to redeploy. Most retirees blend: SPIA on the essentials floor, MYGA stack on top.
Can I deduct LTC insurance premiums as a Schedule C realtor?
Yes, up to age-based IRS limits. As a self-employed taxpayer, LTC premiums are deductible above the line up to the cap that varies by age.
What happens to my SEP if I retire and stop earning commissions?
Nothing — it stays an IRA forever. You just can't contribute more. Distributions taxable as ordinary income; RMDs at 73.
Should I split MYGAs between multiple carriers?
Yes if you're approaching the state guaranty fund cap (typically $250K-$300K per owner per carrier). Two $200K MYGAs at different carriers gives you more guaranty fund coverage than one $400K MYGA at a single carrier.
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Disclosure
This article reflects publicly available product materials and approximate rates as of the date stated above. Annuity rates, caps, participation rates, payout factors, crediting methods, and tax rules change frequently. Always confirm current values against the most recent carrier disclosure document and the actual contract before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product, nor is it tax or legal advice. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity and long-term care insurance market; specific appointment status with any carrier discussed may vary, and discussion of a carrier is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier in connection with the publication of this article. Always read the actual contract and consult a licensed advisor and a CPA or tax attorney before purchasing any annuity or making rollover decisions. Annuities are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings, payout factors, and tax treatment are subject to change. References to the TSP, FERS, CSRS, OPM, USPS, Social Security, IRMAA, WEP/GPO, IRC §72, §453, and §1035 reflect rules as of 2026 and are subject to change.