The Annuity Truth
Straight Answer

Who should NOT buy a fixed indexed annuity?

The clearest test of credibility is being willing to say when the answer is no.

Short Answer
An FIA is a poor fit for money you need fully liquid in the near future, money you expect to use soon, or assets whose primary objective is maximizing long-term market growth. It can also be wrong if it would concentrate too much of your savings in a single strategy. If any of these describe the money in question, an FIA likely doesn't belong there.

What this means for you: The right question isn't "should I buy an annuity" but "should this portion of my money be in an annuity." For several portions, the answer is no.

Specifically, an FIA is generally a poor fit when:

  • You need the money fully liquid for known near-term expenses or emergencies.
  • You expect to use the funds within the surrender period and would be harmed by surrender charges.
  • The primary objective for this portion is maximizing long-term market growth and you can tolerate volatility.
  • Putting this amount in would over-concentrate your savings in any one strategy.
  • You don't understand the contract terms and aren't given the time to.
Putting too much of your retirement savings into any one strategy — including an annuity — can create problems of its own. Diversification across jobs (liquidity, growth, protection, income) is usually wiser than betting everything on one tool.

Who May Prefer Other Options

For near-term money, keep liquid accounts. For growth-focused long-term money you can hold through volatility, direct investments may serve better. For the protected/income portion, an FIA may warrant evaluation.

Questions to Ask Before Deciding

  • Do I need this money during the surrender period?
  • Is growth or protection the priority for this portion?
  • Would this over-concentrate my savings?

Related Questions

What is a fixed indexed annuity?Is my money locked up in a fixed indexed annuity?What's the catch with fixed indexed annuities?Can you lose money in a fixed indexed annuity?

Sources & References

Last updated: 2026-09-29This content is a draft pending qualified human review.
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Disclosures

The content on TheAnnuityTruth.com is educational and general in nature. It is not individualized investment, legal, or tax advice. Annuities are insurance products; product availability and features vary by carrier and jurisdiction, and guarantees are subject to the terms of the issuing insurance contract and the claims-paying ability of the issuing insurer. Annuity contracts are not FDIC insured, are not bank guaranteed, and are not a deposit or obligation of, or guaranteed by, any bank.