Suze Orman Once Sold Annuities. Here Are the Only Kinds She Still Likes

Suze Orman spends plenty of time warning listeners away from annuities. She also spent years selling them. On a May 25, 2025 episode of Suze Orman’s Women & Money, “Suze School: Fortifying Your Financial Freedom and (Again) Understanding Annuities,” she said: “Suze Orman does not hate all annuities in fact, there was a time in the United States for years actually, that I was the number one advisor and salesperson, so to speak, in getting people to buy single premium deferred annuities, I was putting my clients to the tune of about $20 million a year, obviously with a lot of people into annuities. So there are some annuities at specific times in the economy that I absolutely love.”

She said much the same in the April 9, 2023 episode “Suze School: Understanding Annuities”: “All of you need to understand that I do not hate all annuities.” For anyone near retirement who wants guaranteed income, what matters is which annuities she still likes and whether her reasons hold up.

Her Favorite: Single Premium Deferred Annuities

In the 2023 episode she called the single premium deferred annuity “one of my favorite that I really don’t have a problem with, especially when interest rates are higher.” She also explained who it suits: “single premium deferred annuities are usually far better for people who know they are going to turn 59 and a half or older in the year that the surrender charge is up, or they’re already older and they’re looking at that as a replacement for, let’s say, a certificate of deposit.”

In “Suze School: Understanding Variable Annuities” (May 26, 2024), she extended the list: “I like single premium fixed annuities where usually you deposit one sum of money, you get a specific interest rate for a long period of time equal to whatever the surrender period is of that annuity. And I don’t mind those indexed annuities.”

What She Rejects and Why It Costs You

She is blunt about one product. In the same 2024 episode she said: “there is one kind of annuity that I really dislike tremendously, and that is a variable annuity.” In “Suze School: Annuities, Annuities, Annuities” (June 20, 2021), she offered her alternative: “If you want to invest in the stock market, if you want to invest in mutual funds, if you want to invest in exchange traded funds, just invest that way and take advantage of capital gains tax.”

She also ties surrender charges to commissions. In the 2025 episode she said “the surrender charge can start at 10%, going all the way down to 0% over those seven or 10 years” because it “usually equates to the amount of commission that the salesperson or the financial advisor was paid to sell you that annuity.” On retirement accounts, she said in 2024 that “almost in 99% of the cases it makes no sense to put an annuity within a retirement account.”

Where Her Advice Holds Up Under the Tax Code

Her capital gains point is supported by the tax code. Before a nonqualified deferred annuity starts paying out, withdrawals count first as earnings, up to the amount by which the cash value exceeds what you paid in (26 U.S.C. § 72(e)(3)(A)). Those earnings are taxed at ordinary income rates. Growth in a variable annuity’s subaccounts loses the capital gains treatment a regular brokerage account would get.

Her 59½ timing rule has a statutory basis. Section 72(q) adds a tax equal to 10% of the taxable portion of early annuity withdrawals, with an exception for distributions made “on or after the date on which the taxpayer attains age 59½” (26 U.S.C. § 72(q)(2)(A)). Waiting until both that birthday and the end of the surrender period avoids the tax and the surrender charge at the same time.

On IRAs, distributions are taxed under section 72 (26 U.S.C. § 408(d)(1)). IRS Publication 590-B notes that if a traditional IRA held only deductible contributions, “the annuity payments are fully taxable.” An annuity bought inside an IRA gets no extra tax deferral, because the IRA already provides it.

Gaps in Her Framework Worth Knowing

Her CD comparison skips who stands behind the guarantee. A bank CD carries FDIC insurance. An annuity’s guarantee rests on the insurer’s claims-paying ability, with a backstop from state guaranty associations whose coverage limits vary by state. Buyers should check their own state’s limit before comparing an annuity rate with a CD.

The national average 12-month CD paid 1.76% as of October 1, 2026, though top online banks routinely pay 3-5x that average. The 10-year Treasury yielded 4.90% on November 4, 2026. Orman uses Treasuries as her benchmark herself. In a 2022 episode, she said buying a single premium deferred annuity inside an IRA “doesn’t make a whole lot of sense given what interest rates currently are with Treasuries.”

Her favorites are savings products that lock in a rate. Immediate income annuities solve a different problem: the risk of outlasting your money. Turning part of an IRA into lifetime income can make sense even with no tax benefit, and her “99%” leaves room for that (if that is the question keeping you up, we laid out a non-annuity way to build a monthly paycheck from savings in a free guide here). Payments from an immediate annuity contract are also exempt from the section 72(q) additional tax (26 U.S.C. § 72(q)(2)(I)). Her easy acceptance of indexed annuities also leaves out that they come with caps, participation rates and surrender schedules, which should get the same scrutiny she gives variable contracts.

Who Her Guidance Fits and Who It Misses

• Good fit: a retiree in their early 60s with already-taxed savings sitting in CDs, who wants a fixed rate for a set term and won’t need the principal until after the surrender period ends.
• Good fit: a pre-retiree who will be at least 59½ when the surrender period ends and can keep the deposit within their state’s guaranty limit.
• Poor fit: a saver under 59½ who may need the money soon, since a surrender charge and the 10% additional tax could both apply.
• Poor fit: a retiree whose main worry is lifetime income rather than earning a rate. Her rate-focused approach doesn’t address that.

Before using her rules, compare any annuity’s guaranteed rate and term against Treasuries of the same length, read the surrender schedule, and confirm your state’s guaranty limit.

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