A steak-dinner retirement seminar claim that annuities can outperform the stock market prompted MarketWatch to examine the assertion on June 12, 2026 — and the conclusion was unambiguous: fixed annuities are unlikely to beat the historical 8–10% annualised equity returns that have defined long-run stock market performance.

The claim itself is worth unpacking, because "annuities" is not a monolithic category. The product spectrum runs from plain fixed annuities — essentially a guaranteed-rate contract — through indexed annuities, which tie returns to an equity benchmark subject to caps and floors, up to variable annuities, which are classified as complex securities under which policyholders take on direct market exposure inside a long-term contract with the issuing insurer. Each tier sits at a different point on the risk-return curve, and conflating them is precisely the kind of framing that steak-dinner pitches depend on.

The Arithmetic Problem With Fixed Annuities

The case against fixed annuities outperforming equities is structural, not cyclical. A fixed annuity credits a guaranteed rate set at contract inception. Insurers price that guarantee by investing predominantly in investment-grade fixed income, taking a spread, and absorbing longevity risk. The crediting rate is therefore bounded by prevailing bond yields minus insurer overhead and profit margin. In a rate environment where 10-year Treasuries sit well below long-run nominal equity returns, the arithmetic closes off any realistic path to 8–10% net-of-fee annualised gains — let alone outperformance.

Fixed annuities do offer something equities cannot: downside protection and predictable income, which has real value in decumulation. The error the seminar speaker apparently made was framing a liquidity-constrained, principal-protected instrument as an equity substitute rather than an equity complement.

Indexed and Variable: The Risk Gradient Matters

Indexed annuities occupy the middle of the spectrum. As FINRA's investor guidance sets out, they expose holders to more risk and more potential return than fixed annuities but less risk and less potential return than variable annuities. The return mechanism typically involves participation rates, caps, and spreads that truncate upside in exchange for a floor — often zero percent — on the index-linked component. The practical effect is that in strong bull markets, indexed annuity holders surrender much of the gain; in flat or moderately negative markets, the floor provides genuine protection. Over a full market cycle the net result depends heavily on contract terms and sequence of returns, not a straightforward comparison to buy-and-hold equity.

Variable annuities, at the other end, are securities in the regulatory sense. FINRA Rule 2211 requires that retail communications clearly identify products as variable annuities, precisely because the disclosure and suitability obligations that attach to securities differ materially from those governing insurance products. Variable annuities do carry full market participation — but also layered costs including mortality and expense charges, sub-account fees, and surrender penalties that can run for seven years or more. Gross market exposure and net investor return are two very different numbers once those fees are accounted for.

FINRA's 2025 Annual Regulatory Oversight Report contains a dedicated section on annuities, flagging the product category as an ongoing area of focus for member-firm compliance programs. That kind of sustained regulatory attention is not incidental. Complex, long-dated products with opaque fee structures and significant surrender charges create persistent suitability and disclosure risk — and the seminar distribution channel, where urgency and social pressure are baked into the format, is among the highest-risk environments for that to materialise.

What the Pitch Gets Right — and What It Obscures

There is a legitimate case for certain annuity structures in certain retirement portfolios. Guaranteed lifetime income addresses longevity risk in a way that a pure equity allocation cannot. Principal protection can be meaningful for a retiree without the time horizon to recover a drawdown. These are real product features.

What the seminar framing obscures is the cost of those features. Guaranteed returns come at the price of capped upside, illiquidity, counterparty exposure to the issuing insurer, and fee drag. The comparison to market returns is not false in every dimension — indexed products do participate in equity upside to a degree — but presenting any annuity type as capable of outperforming a diversified equity portfolio on a net, risk-adjusted basis over a long accumulation period is not a claim the product mechanics support.

For practitioners evaluating client suitability, the operative questions are: what is the all-in cost, what is the surrender schedule, what is the insurer's credit quality, and what specific risk is the annuity solving for? The answer to the last question almost never is "equity market underperformance."