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Is an Annuity Suitable for You? Key Considerations

Annuities aren't right for everyone. Here are the suitability questions a licensed advisor should walk through with you before recommending one.

6 min readReviewed for the 2026 plan year

Questions That Affect Suitability

  • Do you have sufficient liquid emergency savings outside the funds you're considering for an annuity?
  • What is your time horizon — will you need this money before the surrender period ends?
  • Are you prioritizing principal protection, growth potential, guaranteed income, or some combination?
  • What other guaranteed and flexible income sources do you already have in retirement?
  • Do you understand the specific fees, surrender charges, and limitations of the contract being considered?

When an Annuity May Not Be a Good Fit

  • You may need most or all of the funds within the surrender period
  • You don't have adequate liquid emergency savings elsewhere
  • You're using funds that already have significant tax-deferral or guarantees through another source

Key Takeaways

  • Suitability depends on liquidity needs, time horizon, and your overall financial picture — not the product alone.
  • Adequate emergency savings outside the annuity should be confirmed before committing funds.
  • A licensed advisor should walk through these considerations with you, not just present product features.

This is a general educational framework, not a suitability determination for your specific situation. A licensed advisor must review your full financial picture before recommending any annuity product.

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