What is the Downside to a Fixed Annuity?

Fixed annuities—officially known as Multi-Year Guaranteed Annuities (MIGAs)—are often marketed as simple, safe, high-yield alternatives to bank CDs. However, despite their straightforward appearance, the fixed annuity marketplace is packed with more hidden traps, administrative gimmicks, and deceptive marketing tactics than almost any other annuity category. In this completely unfiltered video, Shawn from The Annuity Expert exposes the major downsides and fine-print traps of fixed annuities. First, Shawn addresses financial carrier risk. In today's high-interest-rate environment, small, lower-rated insurance companies (rated B++ or B-) are aggressively bidding for business with headline-grabbing rates despite having minimal staff and short track records. Shawn advises retirees to verify their State Guarantee Association (SGA) limits—which typically cap coverage at $250,000 per carrier—and split larger balances across multiple A-rated companies to mitigate default risk. Shawn also exposes widespread online "bait-and-switch" marketing tactics. Many annuity websites entice buyers by advertising a high year-one teaser rate (e.g., 6.80%) without disclosing that subsequent years drop significantly, or by advertising non-compounding simple interest rather than true compounding Annual Percentage Yield (APY). Furthermore, Shawn warns about liquidity traps inside restrictive MIGA contracts, such as non-RMD-friendly terms for retirees over age 73/75 and surprise surrender charges applied to death benefits. Finally, Shawn cautions against buying short-term 2- or 3-year MIGAs when rates are at 20-year highs, explaining why locking in long-term rates or utilizing a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider guarantees high payouts for your entire lifetime before market yields drop. 👉 Compare daily updated, true APY fixed annuity rates from top A-rated carriers here: https://www.annuityexpertadvice.com/rates/annuity/fixed/ 📞 Call our team for free, no-obligation advice to safely evaluate fixed annuity rates at: 770-755-1565 ⏱️ Video Chapters: 0:00 - Intro: What is the downside to a fixed annuity? 0:36 - What is a Fixed Annuity / Multi-Year Guaranteed Annuity (MYGA)? 1:12 - The Risk of Teeny-Tiny Insurance Carriers & Low Financial Ratings 2:15 - State Guarantee Association (SGA) Limits ($250k caps & diversification) 2:48 - Liquidity Traps: RMD Restrictions & Death Benefit Surrender Charges 4:18 - Online "Bait-and-Switch" Marketing: Initial Year Rates vs. True APY 6:30 - LTC Annuity Rate Traps & Unvetted Professional Lead Gen 7:36 - Financial Rating Deep Dive: A-Rated vs. B-Rated Carriers 10:55 - Reinvestment Risk: Why 2 to 3-Year MIGAs fall short when rates drop 12:17 - The GLWB Alternative: Locking in peak rates for lifetime income 14:35 - How to compare live MIGA rates anonymously on The Annuity Expert