Fixed Annuity Ladder Strategy

When planning for retirement, one of the biggest challenges is balancing security, growth, and flexibility. Many retirees want guarantees but worry about locking into long-term products at the wrong time. That’s where the fixed annuity ladder strategy comes in. By staggering purchases of fixed annuities over different terms, you can take advantage of current interest rates, reduce reinvestment risk, and maintain access to funds on a rolling basis.

At Diversified Insurance Brokers, we help clients across the country design annuity strategies tailored to their retirement goals. With access to over 75 top carriers, we build customized fixed annuity ladders that maximize safety, liquidity, and guaranteed income.

What Is a Fixed Annuity Ladder?

A fixed annuity ladder involves purchasing multiple fixed annuities with staggered maturity dates. Instead of investing all your funds into a single long-term annuity, you divide your investment into several contracts with different durations. For example, you might place equal amounts into 3-year, 5-year, and 7-year fixed annuities. As each annuity matures, you can reinvest at prevailing rates or use the funds for income.

This strategy creates a steady stream of maturities, helping you benefit from higher rates in the future while reducing the risk of locking in at a single point in time.

Benefits of an Annuity Ladder Strategy

• Rate Diversification: Avoid putting all your money into one rate environment by spreading out purchases.
• Liquidity: As annuities mature, you regain access to funds, providing more flexibility than one long contract.
• Flexibility: Decide at each maturity whether to reinvest, withdraw, or use funds for other financial goals.
• Reduced Reinvestment Risk: Ladders help smooth out the impact of fluctuating interest rates.
• Guaranteed Growth: Fixed annuities provide guaranteed interest accumulation and principal protection.

How to Build a Fixed Annuity Ladder

The exact design of your ladder depends on your goals, age, and income needs. A typical ladder might include:

• 1/3 in a 3-year fixed annuity
• 1/3 in a 5-year fixed annuity
• 1/3 in a 7-year fixed annuity

As each contract matures, you can reinvest in a new annuity at the current rate, keeping your ladder rolling. Over time, this allows you to continually lock into competitive rates while always having funds coming due.

Our advisors can compare rates across dozens of carriers and build a ladder that fits your retirement timeline.

Who Should Consider an Annuity Ladder?

A fixed annuity ladder is a strong fit for:

• Retirees who want guaranteed growth with periodic liquidity
• Pre-retirees looking to hedge against interest rate changes
• Conservative investors seeking safety without stock market risk
• Individuals who want to supplement Social Security or pensions

If you’re unsure whether this approach is right for you, our team can model different scenarios and compare them to alternatives such as traditional annuities, life insurance alternatives, or high-risk life insurance solutions.

Advantages Over a Single Annuity

Some investors question why they shouldn’t just place all funds into a single annuity. While that approach can work, it has risks:

• You may lock into a lower rate environment for many years.
• You’ll have less access to funds until the end of the contract.
• You lose flexibility to adapt as financial needs change.

With a ladder, you gain balance — spreading risk across multiple terms while keeping money accessible at regular intervals.

Real-World Example of an Annuity Ladder

Imagine you have $300,000 to allocate. Instead of placing it all in a single 7-year annuity, you divide it into three equal parts:

• $100,000 into a 3-year fixed annuity
• $100,000 into a 5-year fixed annuity
• $100,000 into a 7-year fixed annuity

After 3 years, your first annuity matures. If interest rates have risen, you can roll it into a new 7-year contract at a higher rate. In year 5, the second matures, giving you another reinvestment opportunity. This rolling structure helps balance short-term liquidity with long-term growth.

How Diversified Insurance Brokers Can Help

As a fiduciary, family-owned agency licensed in all 50 states, Diversified Insurance Brokers offers independent, unbiased advice on annuity strategies. We partner with 75+ carriers, ensuring our clients receive the best available rates and product features. Whether you’re just beginning retirement planning or fine-tuning your portfolio, we’ll help you decide if an annuity ladder fits your long-term goals.

We also advise on complementary strategies like annuity rescue plans, life insurance alternatives, and annuity basics to ensure your retirement plan is well-rounded.

Book a Free Consultation

Talk with one of our advisors about building an annuity ladder tailored to your retirement goals. We’ll compare rates, terms, and reinvestment strategies so you can make an informed decision.