Annuity Ladder Calculator

What Is an Annuity Ladder and How Does It Work?

An annuity ladder splits your money across several annuities with staggered terms, for example 3, 5, and 7 years, so part of your principal frees up at regular intervals. That lets you capture rising rates and keep liquidity instead of locking everything into one contract. Put $300,000 into three equal 3-, 5-, and 7-year MYGAs at $100,000 each, and one rung matures roughly every two years, returning principal you can spend or reinvest at whatever rates are available then. The calculator below sizes a real ladder from your savings, term lengths, and current rates in seconds.

How to Use the Annuity Ladder Calculator

1. Enter your total premium. Type the full amount you want to allocate to the ladder, for example $300,000.
2. Set the rungs and term lengths. Choose how many contracts to build and the term of each, such as 3, 5, and 7 years. The calculator pulls representative MYGA rates by term.
3. Read the results. Review the projected interest, end-of-term value, and maturity date for each rung, then adjust the split until the income and liquidity match your plan.

What the Calculator Is Modeling

Each rung is a multi-year guaranteed annuity (MYGA) or comparable fixed contract earning a set rate over a fixed term. The calculator does three things for every rung:

• Compounding: Applies the rate annually with tax deferral inside the contract, so interest earned in year one is compounding by year two.
• Maturity schedule: Shows when each rung matures and how much principal plus interest is available to reinvest or spend.
• Yield curve handling: Different terms carry different rates, so a 7-year rung typically projects more interest than a 3-year rung.

As of 2026, top MYGA rates run roughly 5.0% to 6.3% depending on term and carrier. You can check current numbers on our fixed annuity rates page and feed realistic figures into the ladder.

A Worked Example: David Ladders $300,000

David is 60 and has $300,000 he wants to keep safe but does not need all at once. Instead of one 7-year contract, he builds a three-rung ladder: $100,000 in a 3-year MYGA, $100,000 in a 5-year MYGA, and $100,000 in a 7-year MYGA.

At roughly 5.5% across the three terms, each $100,000 rung earns about $5,500 a year before compounding. His 3-year rung returns around $117,400 at maturity, freeing up principal he can spend or reinvest while the 5- and 7-year rungs keep growing. By staggering the terms, David always has a rung coming due within a few years instead of waiting seven years for any access.

When the 3-year rung matures, David checks current rates. If rates have risen, he reinvests at the higher number; if he needs the cash, he spends it. He keeps the longer rungs locked in at the rates he secured today. That balance of liquidity and yield is the whole point of the ladder.

Annuity Ladder vs CD Ladder

An annuity ladder and a CD ladder share the same staggered structure but differ on taxes. Annuity interest compounds tax-deferred until you withdraw it; CD interest is taxed every year as ordinary income on a 1099-INT. On a $250,000 to $500,000 ladder, the after-tax MYGA ladder often beats the after-tax CD ladder, with the gap widening in higher tax brackets. Run both side by side with our CD vs annuity calculator before you decide. To project the growth of a single rung on its own, the fixed annuity calculator handles that.

What the Calculator Does Not Do

The calculator is a planning tool, not a quote. It uses representative rates by term, not live carrier-specific numbers. Actual rates depend on carrier, premium amount, state of issue, and product features. Surrender charges and free-withdrawal provisions vary by contract, and the calculator assumes you hold each rung to maturity. Partial withdrawals before maturity may trigger surrender fees. For an exact figure on a specific carrier and product, the next step is a producer-run illustration from one of the 90+ top annuity companies we work with.

Frequently Asked Questions

What is a MYGA ladder?

A MYGA ladder splits a lump sum across several multi-year guaranteed annuities with staggered terms, for example 3, 5, and 7 years, so one rung matures at regular intervals. It blends the higher rates of longer terms with periodic access to your principal as each rung comes due.

How is an annuity ladder different from a CD ladder?

Both use the same staggered structure, but annuity interest compounds tax-deferred until withdrawal while CD interest is taxed every year as ordinary income. That tax deferral usually gives the MYGA ladder a higher after-tax result, especially in higher tax brackets.

How many rungs should I use?

Most retirees use three to five rungs. Three rungs (such as 3, 5, and 7 years) keep things simple while still giving you a maturity every few years. More rungs smooth out access to principal but mean more contracts to track. Match the number of rungs to how often you want money freeing up.

What happens when a rung matures?

When a rung matures, its principal plus accumulated interest becomes available. You can spend it, reinvest it into a new rung at current rates, or roll it into another annuity through a 1035 exchange to keep the tax deferral. Rising rates let you reinvest higher; if you need cash, you simply take it.

Is laddering better than one long annuity?

It depends on your need for liquidity. One long annuity may carry a slightly higher rate, but it locks up all your money for the full term. A ladder gives up a little yield on the shorter rungs in exchange for regular access to principal and the flexibility to reinvest when rates rise. For most retirees who value liquidity, that trade is worth it.

Sources and Further Reading

From MyAnnuityStore

• Annuity Calculators hub
• Fixed Annuity Calculator
• CD vs Annuity Calculator
• What Is a MYGA?
• Today’s Best Fixed Annuity Rates (live)

External authorities

• FINRA: It Pays to Understand Your Annuity, a plain-language primer on how annuities work.
• NOLHGA: State guaranty association coverage, the safety net behind annuity contracts if an insurer fails.