Written by Stina Antonopoulos
Founder of Roots & Wealth | Retirement Income Planning | Author of What If? (Coming August 2026)

Will Annuity Rates Go Down in 2026?

Possibly. If interest rates and bond yields move lower during the remainder of 2026, newly issued fixed annuity and MYGA rates could also decline. But annuity rates do not move automatically with every Federal Reserve decision.

Insurance companies set their own rates based on bond yields, pricing needs, competition and the guarantees they are offering.

Why Federal Reserve Policy Matters

The Federal Reserve does not directly set annuity rates.

However, Fed policy can influence the broader interest-rate environment, including Treasury and corporate bond yields.

That matters because insurance companies invest a significant portion of their assets in bonds. According to the NAIC, more than 60% of life insurers’ aggregate assets are interest-earning bonds. When bond yields are higher, insurers generally have more room to offer competitive rates on fixed insurance products. When yields fall, that opportunity can become more limited.

The Federal Reserve still has several meetings remaining in 2026, including September 15–16, October 27–28 and December 8–9. What happens with inflation, employment and the economy between now and those meetings could influence the direction of interest rates.

That does not mean a Fed rate cut automatically causes annuity rates to drop the following day.

What Really Determines MYGA Rates?

A Multi-Year Guaranteed Annuity, or MYGA, is a type of fixed annuity that generally provides a stated interest rate for a set period.

Think of it like placing money into an insurance contract with a time commitment in exchange for a guaranteed rate.

The insurance company determines the rate it is willing to offer.

That decision can depend on:

Current bond yields

The insurer’s existing investment portfolio

How much new business the company wants

Competition from other insurers

Contract length

Liquidity and surrender provisions

So two insurance companies can offer very different MYGA rates at the exact same time.

This is also why I do not believe you should choose an annuity based only on the highest number advertised.

The contract matters too.

Could MYGA Rates Fall Before the Fed Cuts?

Yes.

Markets often move based on expectations before the Federal Reserve actually changes its policy rate.

If bond investors become convinced that rates will fall, Treasury and corporate bond yields may decline first.

Because insurers price fixed annuities partly around the yields available on their investment portfolios, some companies may adjust new-business rates before an official Fed cut occurs. That is a reasonable inference from how insurer bond portfolios and annuity spreads work.

The opposite can also happen.

If inflation remains stubborn or bond yields rise, competitive annuity rates could remain available longer than people expect.

Nobody knows the exact path.

Should You Lock In an Annuity Rate Now?

I would not purchase an annuity simply because you are afraid rates might fall.

But if you already have money designated for protected growth and you know you will not need full access to it during the surrender period, comparing today’s guarantees may make sense.

The questions I would ask are:

What is this money for?

When will I need it?

How much liquidity do I need?

How long am I comfortable committing the money?

Is the rate guaranteed for the full term?

What happens if I need to withdraw early?

Is another annuity type more appropriate for my goals?

The highest rate is not automatically the best choice.

A five-year contract offering slightly more interest may be less appropriate than a three-year contract if you expect to need the money sooner.

The product needs to fit the job you want the money to perform.

That is how I prefer to approach annuity planning: understand the choices first, then decide what actually fits rather than selling based on an illustration or headline.

FAQ

What is a MYGA?

A Multi-Year Guaranteed Annuity (MYGA) is a fixed annuity issued by an insurance company. It generally credits a guaranteed interest rate for a specified number of years.

The NAIC notes that fixed deferred annuities guarantee at least a minimum credited interest rate, although individual contract terms vary.

MYGAs may also have surrender charges or restrictions on how much money can be withdrawn during the guarantee period, so liquidity should be considered before purchasing.

How fast do annuity rates react to Fed cuts?

There is no fixed timetable.

Annuity companies do not simply wait for a Federal Reserve announcement and then change their rates by the same amount.

Rates may change before a Fed decision if bond yields and market expectations move first. Other insurers may keep rates higher temporarily because they want additional deposits or because their investment portfolios support the existing rate.

That is why annuity rates can move at different times from one carrier to another.

Should I lock in an annuity rate now?

It depends on your goal.

If you already want protected, predictable growth and the contract term fits your liquidity needs, locking in a competitive guaranteed rate may be worth considering.

If you may need the money soon, or if flexibility is more important than the guarantee, locking into a longer surrender period may not make sense.

Do not make the decision solely because someone says rates are about to disappear.

Understand the entire contract first.

The Bottom Line

Annuity rates could move lower during the remainder of 2026, particularly if market interest rates and bond yields decline.

But nobody knows exactly when that will happen or how quickly individual insurance companies will respond.

You cannot control the Federal Reserve.

You can control whether you understand the options available to you today.

If money is already intended for safe growth or future retirement income, this may be a good time to compare current MYGA and fixed-annuity options, understand the trade-offs and decide whether locking in a guarantee makes sense for your situation.

Ready to Take the Next Step?

Retirement isn't just about numbers. It's about the life you've worked so hard to build.

Whether your dream is traveling more, spending time with your grandchildren, supporting the causes you care about, or simply enjoying the peace of knowing your bills are covered, your financial decisions today can shape the future you envision.

I believe every family deserves honest guidance, thoughtful education, and a retirement strategy built around their unique goals—not a one-size-fits-all recommendation.

Throughout my career, I've had the privilege of helping individuals and families navigate important financial decisions involving retirement income, life insurance, annuities, mortgages, and real estate. One thing I've learned is that every family's story is different, and every retirement plan should be too.

Before we ever talk about products or strategies, I want to understand you.

What does financial freedom mean to you? What are your biggest concerns? What kind of legacy do you hope to leave? Those conversations are the foundation of every recommendation I make because the best plans begin with listening.

My role isn't to tell you what to do. My role is to educate you, simplify complex financial decisions, and help you feel confident in the choices you make for yourself and your family.

Whether you're just beginning to plan for retirement or looking for a second opinion on your current strategy, I'd be honored to be a resource for you.

Why "Roots & Wealth"?

When I chose the name Roots & Wealth, it wasn't just because it sounded good. It reflects what I believe financial planning should be.

Just like a strong tree, lasting financial security begins with strong roots.

Those roots are built through education, thoughtful planning, meaningful conversations, and decisions that align with your values. Wealth isn't only about the size of your portfolio—it's about having choices, creating stability, protecting the people you love, and living with confidence.

Life will bring changing seasons. Markets will rise and fall. Tax laws will change. Unexpected challenges will happen. But when your financial foundation is built on strong roots, you're in a better position to weather those changes and continue growing.

That's the philosophy behind everything I do.

My goal is to help you build a retirement strategy that's deeply rooted in what matters most to you, so you can enjoy today while creating a lasting legacy for tomorrow.

If you're ready to build a retirement strategy with confidence and clarity, I'd love the opportunity to meet you. Schedule your complimentary Retirement Strategy Consultation and let's start growing your Roots & Wealth together.

Educational Disclosure

This article is for educational purposes only and is not financial, tax, or legal advice. Annuity products are insurance contracts. Guarantees are backed by the claims-paying ability of the issuing insurance company. Product availability, rates, surrender schedules, withdrawal provisions, riders, caps, participation rates, spreads, and other terms vary by carrier and state. Withdrawals may be subject to surrender charges, taxes, and, if taken before age 59½, potential IRS penalties. Fixed index annuities are not stock market investments and do not directly participate in any stock or equity index. You should review your personal situation with a qualified professional before making a decision.