Suze Orman defends single premium deferred annuities as interest rates hold steady

Suze Orman continues to favor single premium deferred annuities, having previously directed approximately $20 million annually of client assets into the product. She recommends these instruments for individuals near or past age 59½ who seek a replacement for certificates of deposit, particularly when interest rates are favorable. The structure allows buyers to lock in a specific interest rate for a set period, aligning with the surrender charge schedule.

Orman remains critical of variable annuities, arguing they often lack the capital gains tax treatment available in standard brokerage accounts. She also notes that placing annuities inside retirement accounts is rarely advantageous because the account already provides tax deferral. Her preference for immediate income annuities addresses the risk of outliving savings, with payments exempt from the additional early withdrawal tax.

Current market conditions support her stance. The national average 12-month CD paid 1.76% as of October 1, 2026, while the 10-year Treasury yielded 4.90% on November 4, 2026. Orman uses Treasuries as a benchmark, suggesting that annuities must compete with these yields to justify their costs. Buyers are advised to compare guaranteed rates against Treasuries and verify state guaranty association limits.

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