Last updated: April 11, 2026 | By Jason Caudill, MBA | Reviewed by the MyAnnuityStore Editorial Team
Suze Orman has said she hates annuities. She’s said it on her podcast, on CNBC, and in her books. If you’ve ever Googled “should I buy an annuity,” there’s a decent chance you ran into a clip of her telling someone to stay away.
She’s not entirely wrong. But she’s not talking about the same products most retirees are actually buying today.
Here’s a clear-eyed look at what Suze Orman has actually said, where the criticism holds up, and where it misses the mark for people with $100,000 to $500,000 to protect in retirement.
What Suze Orman Has Said About Annuities
Her most consistent position, repeated across years of media appearances, is that variable annuities are bad for most people. In her words: “I am not a fan of variable annuities for the vast majority of people.”
She has pointed to several specific problems:
- High fees. A typical variable annuity carries 3% to 4% per year in total costs when you add mortality and expense charges, administrative fees, subaccount expenses, and optional rider fees. On $200,000, that’s $6,000 to $8,000 per year leaving your account before you see a dollar of return.
- Layered tax deferral. Putting a variable annuity inside a traditional IRA or 401(k) is “one of the worst financial moves you can make,” she’s said – because IRAs are already tax-deferred, so the annuity wrapper adds cost without adding the one benefit that justifies that cost.
- Complexity that favors the seller. She’s been skeptical of products that are hard to understand, noting that when a financial product is confusing, that confusion usually benefits the person selling it, not the person buying it.
- Timing. She’s said people in their 30s, 40s, and early 50s are generally too young to buy annuities – that the money grows better in the market during accumulation years.
These aren’t fringe positions. Most fee-only financial planners would agree with at least the first two points without reservation.
Where Suze Orman Is Right
On variable annuities, the criticism is largely valid.
A fully loaded variable annuity with a guaranteed lifetime withdrawal benefit rider can easily cost 3.5% to 4.5% per year. At that fee load, the underlying subaccounts need to return 7% to 8% just to net the same result as a low-cost index fund. Most years, they don’t.
Consider a 65-year-old who puts $250,000 into a variable annuity returning 7% gross with a 3.75% annual fee load. After 10 years, their account grows to roughly $356,000. The same $250,000 in a low-cost S&P 500 index fund returning 7% net of a 0.05% expense ratio grows to about $492,000. The annuity costs this person $136,000 in growth over a decade – and that’s before accounting for any market losses in the variable subaccounts.
The tax deferral argument also holds. If you are contributing to a traditional IRA and someone suggests wrapping those contributions in a variable annuity, the only person winning on that transaction is the broker. Tax deferral on top of tax deferral adds zero benefit and meaningful cost.
And her point about complexity is worth sitting with. If you can’t explain how a product makes money for you after reading the prospectus twice, that’s a real warning sign.
Where the Advice Falls Short
The problem is the scope. When Suze Orman says “I don’t like annuities,” she’s describing one product type – the variable annuity – and applying that judgment to an entire product category that includes five distinct structures.
Fixed index annuities and multi-year guaranteed annuities (MYGAs) work nothing like variable annuities. They share the same legal wrapper – an insurance contract – but the mechanics, the risks, and the cost structure are fundamentally different.
Here’s how they compare on the three criticisms she raises:
| Orman’s Criticism | Variable Annuity | Fixed Index Annuity | MYGA |
|---|---|---|---|
| High fees (3-4%/yr) | Yes – M&E + rider costs stack up | No explicit annual fee unless you add an income rider (0.5-1.2%/yr) | No fees at all – rate is net |
| Market downside risk | Yes – full subaccount exposure | No – 0% floor, can’t lose to index drops | No – fully guaranteed rate |
| Confusing structure | Very – prospectus + rider stacking | Moderate – caps and crediting methods take 20 min to learn | Simple – one guaranteed rate, one term |
| Wrong for IRAs | Yes – double tax deferral with high fees | Acceptable – only if using lifetime income rider for Roth or non-qual money | Depends – MYGA inside Roth IRA can work well; inside traditional IRA adds no tax benefit |
On the fee issue specifically: a no-rider FIA has no explicit annual fee. The carrier makes its margin by keeping a portion of the index gain – the gap between the real index return and your cap. That’s an opportunity cost, not a deducted fee. In a year where the S&P 500 returns 18% and your cap is 10%, you credit 10% and the carrier keeps the rest. In a year where the S&P drops 20%, you credit 0% and lose nothing. That trade – capped upside for zero downside – is the entire value proposition. It’s not a hidden fee.
The Scenario Suze Orman’s Advice Was Built For
To be fair to her, the audience Suze Orman built her brand around is not the audience that benefits most from FIAs.
Her core listeners in the 2000s and 2010s were younger people trying to build wealth – people who needed growth, had decades of runway, and were getting sold expensive variable annuities inside IRAs by commission-driven brokers. That audience absolutely should have stayed in low-cost index funds. Her advice was right for them.
The audience that benefits from a fixed index annuity looks different:
- Age 58 to 70, within 5 to 10 years of or already in retirement
- $100,000 to $500,000 to allocate – money they cannot afford to see fall 30% in a market crash
- Looking for growth that outpaces a CD or bond fund without taking equity market risk
- Willing to give up some upside in exchange for a floor of zero
For that person, putting money in a variable annuity is still a bad idea. But putting it in a well-structured FIA from a highly rated carrier is a reasonable choice that Suze Orman’s sweeping criticism doesn’t actually address.
What Suze Orman Has Said More Recently
Her position has softened slightly on one narrow category. In a 2020 interview, she acknowledged that immediate annuities – specifically single premium immediate annuities (SPIAs) that turn a lump sum into a guaranteed monthly payment for life – can make sense for retirees who are worried about outliving their money. She’s called them “pension-like” and noted that for someone without a pension who will live a long time, converting a portion of savings into guaranteed income can provide peace of mind that a brokerage account cannot.
That’s a meaningful shift. It’s also a product type that works on similar principles to the income riders on FIAs – turning accumulated savings into lifetime cash flow.
What she still hasn’t addressed publicly is the MYGA or no-rider FIA as a fixed-income alternative for conservative retirees. That gap in her advice is where most of our clients at MyAnnuityStore find value.
Three Questions to Ask Before You Follow Anyone’s Annuity Advice
Whether the advice comes from Suze Orman, your brother-in-law, or us, these three questions should run before you act:
1. Which specific type of annuity are they talking about? “Annuity” is not one product. Variable, fixed, indexed, immediate, and deferred are all structurally different. Advice that’s accurate for one type can be completely wrong for another.
2. What is the fee structure? Ask for the total annual cost in dollars, not percentages. If the person explaining it can’t give you a clear dollar figure, that’s a red flag. MYGAs have zero fees. Base FIAs have zero explicit fees. Riders cost 0.5% to 1.2% per year, which you should know before signing.
3. What are the alternatives for this specific dollar? The right comparison isn’t “annuity vs. the stock market” for money you’re putting into an FIA. The right comparison is “FIA vs. a 5-year CD vs. a short-duration bond fund vs. a MYGA” for money that needs to be conservative. On that comparison, FIAs and MYGAs often win on net after-tax return.
Bottom Line
Suze Orman’s annuity criticism is a reasonable warning about a specific product – variable annuities with high fees – that has been mis-sold to millions of Americans. That warning is worth taking seriously.
It is not an accurate description of fixed index annuities or MYGAs, which address the core complaints (fees, market risk, complexity) in ways variable annuities do not.
If you heard Suze Orman say she hates annuities and walked away from the topic entirely, it’s worth taking another look at the products she wasn’t describing. A no-fee MYGA locking in 5.2% for five years with tax-deferred growth is a structurally different product than a variable annuity charging 3.75% per year to lose 30% in a bad market year.
They happen to share a name. That’s about where the similarity ends.
Related Reading
Frequently Asked Questions
More Pundit Fact-Checks
Sources & Citations
- Suze Orman, The Money Class (2011), variable annuity critique, pp. 214-219
- Suze Orman Show, CNBC (2009-2015), “Should I buy an annuity?” recurring segment
- LIMRA Secure Retirement Institute, U.S. Individual Annuity Sales Survey, Q4 2025
- NAIC, Life Insurers Industry Analysis Report, 2024
- Morningstar, Variable Annuity Fee Study, 2023 (average all-in VA cost: 3.61%)
