MYGA Ladders — Maximize Returns with Fixed-Rate Annuities

Written by Ariel Stern Updated September 15, 2025

Why Hesitating Might Hurt Your Investment Returns — and What You Can Do About It

When you're looking to invest in a Fixed-Rate Annuity — also called a Multi-Year Guarantee Annuity — you might wonder if now is the “right time” to buy. It’s easy to get sidelined while trying to time the market. And if you are sitting on the sidelines with your money sitting in low yield accounts, you are missing out on potential earnings and growth.

Research from The Schwab Center for Financial Research shows that people who systematically invest - either according to a schedule or when the funds are available - typically outperform those who try to time the market. Only those with perfect timing come out ahead, meaning you either need to be a financial expert or incredibly lucky to win by timing the market.

For most people, trying to time the market leads to lower returns. This means using a systematic investment approach is generally more practical and profitable.

So how do you systematically invest in Fixed-Rate Annuities? Using an annuity ladder is a great strategy to help ease into annuity investing and achieve good results.

What is an annuity ladder?

Annuity ladders can take a few forms. Generally speaking, you can buy annuities at different times to lock in different interest rate environments or buy annuities with different durations to free up your money at different points in time.

In their essence, annuity ladders are similar to a Certificate of Deposit (CD) Ladder. One major benefit to an annuity ladder over a CD ladder is that fixed-rate annuities generally offer better rates than CDs, but also typically have higher surrender penalties and may employ a market value adjustment. When you compare an Annuity Ladder against a CD Ladder, you should consider your liquidity needs against your earnings potential. Kiplinger recommends annuity ladders for people with enough money to spread across multiple annuities.

Why does buying annuities with different durations make sense?

You may be asking yourself, is laddering fixed annuities a good idea? Yes! If you buy annuities with different durations, it means that your annuities end at different times. This means that your funds become available in different interest rate environments, reducing the risk that most of your money becomes available in a low interest rate environment or that you miss out on high interest rates while your money is still tied up in an annuity.

The good news is that once your money becomes available, you have at least a 30-day period to move your money. You can do a 1035 exchange with non-qualified funds or a transfer with qualified funds into another annuity, giving you the flexibility to shop around for the best rate while continuing your tax deferral.

This strategy helps you hedge against inflation and poor market timing by diversifying your annuity time horizons. Kiplinger suggests that you look at the annuity rate curve when picking your investment periods, as certain terms may have generally higher yields than others based on the current financial environment.

Here is a fixed annuity ladder example:

To summarize, buying annuities with different durations can:

• Reduce the risk of reinvesting during a low-interest rate environment
• Capture higher interest rates when they are available
• Allow greater flexibility to accessing your funds by staggering their terms
• Use 1035 exchanges or transfer to reinvest your MYGA earnings and continue your tax deferral

When would you buy annuities at different points in time?

This strategy is similar to dollar-cost averaging. Essentially, you purchase fixed-rate annuities at different times to lock in annuity rates in different interest rate environments. This reduces the risk that you tie up your money in a low interest rate environment. When you employ this strategy, you can purchase annuities with terms that end when you will need the money or simply buy the annuity that offers the best interest rate at that time.

When you use this type of ladder, you have the benefit of truly easing your way into buying fixed-rate annuities. You are buying smaller chunks at a time, often making it more palatable for nervous or first-time annuity buyers. And the good news is that you can still employ 1035-exchanges or direct transfers to defer taxes on your annuity earnings.

What are the downsides to an annuity ladder?

If you’re considering an annuity ladder, make sure you understand the downsides as well as the benefits. While fixed-rate annuities often carry higher interest rates than bank CDs, annuities also often have higher surrender charges, and generally the highest rate annuities also feature market value adjustments.

In addition to this, you should make sure you are purchasing annuities from highly rated insurance companies. While it is rare, insurance companies can, and occasionally have, defaulted. Before you commit to any annuity, make sure you check out the insurance company’s ratings.

Lastly, fixed-rate annuities often have different tiers or “bands” based on your premium payment. Generally, “high band” annuities, or those with higher initial investment amounts, have higher interest rates. If you split your money up into too many containers, you may miss out on higher rates because you no longer meet the high-band minimums.

How to get started on an annuity ladder?

If you’ve decided you’d like to use an annuity ladder to secure your financial future, we can help you get started. One of the most important parts of buying an annuity is shopping around. There are many different insurance companies with different terms, rates, and ratings. In fact, annuity rates can vary significantly, so it truly pays to compare rates.

Before you get started, make sure you:

• Compare annuity rates across multiple insurers
• Confirm the insurer’s financial strength
• Pick a laddering plan you can stick to
• Work with a trusted, licensed annuity expert

Our experts can help you find annuities that meet your timeframe, needs, and formulate the best annuity laddering strategy. They can also help you understand the terms of each annuity contract to ensure it will live up to your expectations. If you want to get started, call our U.S.-based annuity experts at (866) 866-1999. We can help you build an annuity ladder that you are comfortable with and will serve you well for many years.

References:

• Boss, Lyle. “Need an annuity ladder? There are many uses for them” InsuranceNewsNet, November 3, 2022, https://insurancenewsnet.com/oarticle/need-an-annuity-ladder-there-are-many-uses-for-them.
• Schwab Center for Financial Research. “Does Market Timing Work?” Schwab Center for Financial Research, July 18, 2025, https://www.schwab.com/learn/story/does-market-timing-work.
• Nuss, Ken. “Laddering Fixed-Rate Annuities Offers Rates That Beat Bank CDs, Plus Flexibility” Kiplinger, February 20, 2022, https://www.kiplinger.com/retirement/annuities/604235/laddering-fixed-rate-annuities-offers-rates-that-beat-bank-cds-plus.
• Vanguard. “CD ladder: What it is and how to build one” Vanguard, June 03, 2025, https://investor.vanguard.com/investor-resources-education/article/cd-ladder.