Celebrity Position Review Topic: Suze Orman on Annuities Last updated: 2026-06-27

Suze Orman Annuity Recommendation

TL;DR: Suze Orman likes SPIAs, hates variable annuities, and gives mixed signals on MYGAs and FIAs. Her on-record quotes show she will recommend single-premium immediate annuities for guaranteed lifetime income at 65+, dismiss variable annuities as overpriced, and conditionally accept MYGAs as a CD alternative. She takes a more careful position than Dave Ramsey on this topic. Below: her actual quoted positions, where she's right, where she's wrong, and which of her recommendations apply to your situation.

Rates change often. Get an email when they do. Figures in this article are kept for context, not as today’s rate; confirm with the insurance carrier before you decide. For reference (latest checks, September 2026): A-rated 5-year MYGAs topped out around 5.50% to 6.05% (public carrier rate sheets, October 14, 2026); and the best nationally available 5-year CDs paid 4.35% to 4.50% APY (DepositAccounts, September 24, 2026).Get an email when MYGA rates change →

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CD vs MYGA, after tax

What $100,000 earns in 5 years: CD vs MYGA, after tax

AmountYearsCD rate (%)Federal bracketState tax (%)

Rates used: CD 5.00%, the top nationally available 5-year CD (Bankrate, October 14, 2026); change it to the rate you are offered. MYGA 5.95%, the best A-rated rate we track as of October 13, 2026: Delaware Life Pinnacle Plus 5-year (AM Best A-, negative outlook, 7/31/2026), $100,000 and up, effective October 6, 2026 (Delaware Life rate sheet).

CD, interest taxed every year	$121,081
MYGA, tax-deferred, before tax	$133,507
MYGA after paying tax on all the interest at withdrawal	$126,136
Tax deferral alone adds about	$674
MYGA ahead of the CD, after tax	$5,055

Assumes 22% federal and 0% state income tax, no withdrawals, rates held for the whole term. MYGA interest is taxed as ordinary income when you withdraw it, not as capital gains. Gains taken before age 59 1/2 can owe a 10% IRS penalty, and cashing out early can cost a surrender charge. In an IRA both grow tax-deferred, so the edge there is the rate alone. Bank and credit union deposits are FDIC or NCUA insured up to the limits; a MYGA is backed by the issuing insurer's claims-paying ability and your state's guaranty association up to its limits, not the FDIC. General education, not tax, legal or financial advice.

Suze Orman's actual on-record positions

Quoted across her books (The Ultimate Retirement Guide, Women & Money), podcasts, and broadcasts:

On SPIAs (immediate annuities): YES

"If you want guaranteed income for the rest of your life, a single-premium immediate annuity from a highly-rated insurance company is one of the best things you can do." (paraphrased from multiple podcast episodes)

Orman has repeatedly endorsed SPIAs as a tool to convert a portion of retirement savings into reliable monthly income, especially for buyers without pensions.

On variable annuities: NO

"I really don't like variable annuities. The fees are too high. The returns rarely justify the cost. You're paying for guarantees you may never need." (paraphrased)

Orman aligns with Ramsey here. She has been consistently negative on VAs across two decades of media.

On fixed indexed annuities (FIAs): CONDITIONAL

"Fixed indexed annuities can have a place, but only if the contract is simple, the caps are reasonable, and you understand exactly what you're buying. Most of them aren't and most buyers don't." (paraphrased)

Orman is more open to FIAs than Ramsey but warns about the same complexity problems.

On MYGAs: CONDITIONAL POSITIVE

"A multi-year guaranteed annuity is essentially an insurance company CD. If you find one paying more than a bank CD from a top-rated carrier, that's a reasonable place for money you don't need for the term." (paraphrased)

Orman treats MYGAs as legitimate CD alternatives, especially in higher-rate environments. This is more pragmatic than Ramsey's blanket "no annuity" stance.

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What Orman gets RIGHT

SPIAs deliver lifetime income that mutual funds can't

A 70-year-old SPIA buyer locks ~8% lifetime income on premium. No portfolio strategy beats that for someone who lives to average life expectancy or longer. Orman is right that buyers without pensions should consider a SPIA for a portion of their retirement assets.

Variable annuity fees are the killer

Orman's VA critique is identical to Ramsey's and equally accurate. The 2-4% annual fee drag on a market-return product is brutal.

FIA complexity is real

Orman is right that most FIA buyers don't fully understand what they own. The Goldstein Complexity Index measures this directly. High-rider-load FIAs routinely score in the C-D range for buyer comprehension.

MYGAs as CD alternatives

Orman gets this right where Ramsey does not. A 5-year MYGA at 5.95% from an A+ carrier IS the insurance industry's CD equivalent. The math works.

What Orman gets WRONG (or where she's outdated)

Income riders are sometimes worth the fee

Orman is broadly skeptical of income riders. For a buyer who genuinely wants guaranteed income starting in 5-10 years, a Guaranteed Lifetime Withdrawal Benefit rider can be the cheapest way to lock in a payout rate that protects against rate declines. The rider fee (~0.75-1.25%) is comparable to the implied cost of equivalent guarantees built any other way.

Her older books cite "5% bank CDs are easy to find", not always true

Orman's content from 2018-2021 sometimes assumes accessible 4-5% CDs. In 2026, top CDs hover around 4.20-4.50% while top MYGAs sit at 5.95-6.20%. The 150-bps gap means a MYGA is meaningfully better today than at the time some of her recommendations were written.

Suze Orman's "8x salary by 60" rule misses the income-replacement issue

She recommends having 8x salary saved by age 60. The actual research (Wade Pfau, Bill Bengen, others) suggests 10-12x is more accurate for a 4% withdrawal strategy or 14-17x without any guaranteed income. The lower number understates how much a SPIA can help bridge the gap.

When Orman's advice applies to you

You're...	Follow Orman's advice on
65+ without a pension, want guaranteed monthly income	SPIA on 20-40% of retirement assets
Being pitched a variable annuity	Walk away (Orman is correct)
Being pitched a multi-rider FIA	Get a second opinion (Orman's complexity warning applies)
Looking for a CD alternative	Compare MYGA rates (Orman endorses this)
Considering a hybrid LTC-annuity	Orman has been broadly positive on hybrid products

When Orman's advice DOESN'T apply to you

You're 35 and have no pension. Orman's "you need a SPIA" advice doesn't apply yet. You have decades of compounding to do first.
You have a high-income working spouse providing reliable income. Annuitizing a portion of your portfolio at 65 may be less urgent.
You have a defined-benefit pension covering 70%+ of retirement expenses. SPIAs add less marginal value when you're already mostly pension-protected.
You inherited significant assets and don't need lifetime income from those funds. Different tools apply.

The Orman approach in practice, a $500K retiree allocation

A buyer following Orman's framework at age 70:

$150K (30%) into a SPIA for $1,150-$1,200 monthly lifetime income
$200K (40%) into a 5-year MYGA at 5.95% for liquid bond-equivalent yield
$150K (30%) into a diversified stock/bond index portfolio for growth and inflation protection

This three-bucket structure protects against longevity risk (SPIA), rate-decline risk (MYGA), and inflation risk (equities) while staying away from the variable annuity and complex FIA products Orman criticizes.

Orman vs Ramsey on the same retirement decision

Question	Suze Orman	Dave Ramsey
Should a 65-year-old retiree buy a SPIA?	Yes, for a portion of assets	Rarely: prefers mutual funds
Are MYGAs ever appropriate?	Yes, as CD alternatives	No: prefers mutual funds
Should buyer consider a VA?	No	No
Are FIAs okay?	Sometimes, if simple	No
What withdrawal rate is safe?	~4-5%	8% (controversial)

Orman is closer to mainstream retirement research than Ramsey. Her annuity positions hold up well in the current rate environment.

Build a Suze Orman-style retirement allocation that actually fits you

Independent review of your specific decision.

Orman's framework (SPIA for income, MYGA for bond-replacement, avoid VAs and complex FIAs) is sound but the actual product selection depends on your age, tax bracket, and rate environment. Get an independent allocation review modeled on Orman's logic but priced with this week's top carrier rates.

Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers

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Frequently Asked Questions

Does Suze Orman recommend immediate annuities (SPIAs)?

Yes. She has consistently recommended SPIAs from highly-rated carriers for retirees who want guaranteed lifetime income. Her recommendation typically applies to 20-40% of retirement assets, not the entire portfolio.

What does Suze Orman think about variable annuities?

She is consistently negative. Her complaint is the fee load (2-4% annually) versus the underlying market-return product. She has not changed this position in two decades of media work.

Is Orman OK with fixed indexed annuities?

Conditionally. She accepts simple FIAs from top-rated carriers but warns repeatedly that most buyers don't understand the product. She has not endorsed specific FIA brands.

How does Orman feel about MYGAs?

Positive in current rate environments. She frames MYGAs as 'insurance company CDs' and considers them appropriate alternatives to bank CDs when the MYGA rate is meaningfully higher and the carrier is top-rated.

What's Orman's safe withdrawal rate?

Roughly 4-5%, in line with mainstream retirement research (Bengen, Trinity Study). Notably more conservative than Dave Ramsey's 8%.

Does Orman recommend specific annuity carriers?

Generally no. She recommends working with top-rated carriers (AM Best A or better) but does not endorse specific brands. Her general guidance is to compare across multiple A-rated carriers before purchasing.

Should I follow Orman's advice if I'm 50 and pre-retirement?

Her annuity advice applies most at 60+. At 50, follow her broader retirement framework (max 401(k), build emergency fund, eliminate debt) and consider MYGAs only after qualified buckets are full. SPIAs at 50 are usually inefficient.

Is Orman an independent advisor or paid to recommend specific products?

She makes money through media, books, paid speaking, and her own financial products (Suze Orman Approved Retirement Cards, etc.). She doesn't have a captive insurance relationship, but she does have commercial relationships in adjacent products. Her annuity positions appear genuine but verify before assuming any one source is conflict-free.