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MassMutual Annuity Review

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Founded back in 1851, Massachusetts Mutual Life Insurance Company (MassMutual) is a mutual company, meaning its policyholders are  essentially co-owners of the business. It's part of financial services company MassMutual Financial Group, which includes Haven Life Insurance, MML Investors Services, Barings and more. Annuities are only part of what MassMutual can provide: It also offers life insurance, long-term care insurance, brokerage products, advisory services and budgeting tools.

If you’re considering using annuities as part of a retirement income strategy, it’s a good idea to consult with a financial advisor first.

Annuity Fees Annuity Type Minimum Initial Premium More Information
Stable Voyage Find an Advisor

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  • No annual contract fees
Fixed deferred annuity $10,000

Annuity Type

Fixed deferred annuity

Minimum Initial Premium

$10,000
Capital Vantage® B-Share Find an Advisor

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  • 1.00% combined administrative and mortality and expense risk fee
  • $40 annual contract maintenance fee
  • Fund fees ranging from 0.54% - 2.33%
  • Various rider charges
Variable annuity $10,000

Annuity Type

Variable annuity

Minimum Initial Premium

$10,000
Transitions Select II Find an Advisor

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  • 1.30% combined administrative and mortality and expense risk fee
  • $40 annual contract maintenance fee
  • Fund fees ranging from 0.54% - 2.33%
Variable annuity $10,000

Annuity Type

Variable annuity

Minimum Initial Premium

$10,000
RetireEase Find an Advisor

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  • No annual contract fees
Single premium immediate annuity (SPIA) $10,000

Annuity Type

Single premium immediate annuity (SPIA)

Minimum Initial Premium

$10,000

MassMutual is one of the biggest and oldest players in the insurance and annuity game, and its financial strength grades confirm its staying power. More specifically, Fitch ranks it at an AA+ (the second highest of 21 grades), A.M. Best ranks it at an A++ (highest category of 15), Moody’s ranks it at an Aa3 (fourth highest of 21) and Standard & Poor’s (S&P) ranks it at an AA+ (second highest of 21). These ratings are valid as of March 2020.

Stable Voyage

If you’re interested in purchasing the Stable Voyage fixed deferred annuity, you’ll need at least $10,000. In addition to this requirement, the maximum issue age for this contract is 85.

When you open your account, MassMutual will let you pick from five interest rate guarantee periods that last three, four, five, seven and nine years, respectively. Once this period ends, you can renew for any of those terms or for a one-year term, if you so choose.

The death benefit associated with this annuity is variable depending on which stage your contract is in. During the accumulation phase, the payout will be equal to your contract value on the day proof of death is observed by MassMutual. If you’ve begun receiving income, though, the death benefit will instead be decided by which payment style you go with.

Fees

Stable Voyage annuitants currently won’t pay any percentage-based or fixed-rate annual fees to own this contract. However, MassMutual does reserve the right to charge up to a $50 fixed-rate annual fee at any time.

If you find yourself needing some extra money, go ahead and take advantage of MassMutual’s 10% fee-free withdrawals. Any amount of money you withdraw beyond this cap will result in a withdrawal fee, though.

Withdrawal Fees During Initial Guarantee Period
Term Length Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
3 Years 7% 7% 7%            
4 Years 7% 7% 7% 6%          
5 Years 7% 7% 7% 6% 5%        
7 Years 7% 7% 7% 6% 5% 4% 3%    
9 Years 7% 7% 7% 6% 5% 4% 3% 2% 1%

Planning on renewing your contract following the initial guarantee period? If so, these slightly different fees will apply instead:

Withdrawal Fees During Initial Guarantee Period
Term Length Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
1 Year 0%                
3 Years 6% 6% 6%            
4 Years 6% 6% 6% 5%          
5 Years 6% 6% 6% 5% 4%        
7 Years 6% 6% 6% 5% 4% 3% 2%    
9 Years 6% 6% 6% 5% 4% 3% 2% 1% 1%

Note that if you withdraw from your account before you reach age 59.5, you’ll pay a 10% income surtax in addition to standard income taxes.

Realistic Return Expectations

As of July 2019, the Stable Voyage annuity comes with a variable interest rate that’s based on the initial term length you select. These rates range from 1.50% to 2.30%.

Capital Vantage® B-Share

Variable annuities are popular retirement savings vehicles, as they combine the protections of an annuity with the ability to make investments that grow your money. The Capital Vantage® B-Share contract from MassMutual offers a plethora of investment funds that follow different investment strategies. Some stick to small-, mid- or large-cap equities, whereas others might invest solely in bonds or emerging markets. This range of funds should appease both risky and risk-averse investors.

There are a couple of investment-related programs you can take advantage of through MassMutual. If you want to keep your portfolio’s intended asset allocation intact, the company offers automatic rebalancing. You can also set up regular automatic withdrawals from an account of your choice to be allocated to your investment account.

The standard death benefit for this annuity is equal to your contract’s value during the accumulation period. For an extra cost, you can upgrade to the Return of Purchase Payment Death Benefit that guarantees your beneficiary will get back at least what you paid into your contract.

The minimum initial investment for this contract is $10,000. To open an account, you must be 85 years old or younger.

Fees

There are a couple of annual contract fees related to the Capital Vantage B-Share annuity. The first is a fairly significant 1.00% combined administrative and mortality and expense risk fee. MassMutual also charges a $40 annual contract fee, though this is waivable if your contract value is at least $100,000.

Investments are the core of any variable annuity, but they come with their own fees. Depending on the fund you choose to invest in, management and 12b-1 fees could run you anywhere from 0.54% to 2.33%.

The Return of Purchase Payment Death Benefit can be added onto your contract. If this interests you, be prepared to incur an additional 0.35% annual fee.

MassMutual allows annuitants to withdraw up to 10% of their purchase payments before they incur any fees. Surpass this limit and you’ll be subject to these charges:

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5+
7% 6% 5% 4% 0%

Annuitants younger than 59.5 years old pay a 10% income surtax when they withdraw from their annuity. This doesn’t even include standard income taxes.

Realistic Return Expectations

MassMutual provides around 50 investment funds that annuitants can allocate their assets to. Based on the company’s June 2019 data, these funds have garnered anywhere from -2.17% to 13.29% in returns over the last five years.

Transitions Select II

Investments are at the core of the Transitions Select II variable annuity from MassMutual. Like the rest of the company’s variable products, there’s no shortage of funds to invest in. Each follows a specific investment philosophy, so pick the ones that most closely align with your personal goals and risk tolerance.

MassMutual provides a free automatic investment plan (AIP) for this annuity that can regularly transfer funds from any of your accounts to your contract. You can also sign up for the company’s automatic rebalancing program, which will help to maintain your original asset allocation.

The minimum initial premium for this annuity contract is $10,000.

Fees

While MassMutual charges owners of this annuity a $40 contract maintenance fee, it’s waivable for any accounts that are at least $100,000 in size. Annuitants must also pay a 1.30% annual administrative and mortality and expense risk fee.

Investment funds charge their own fees too, ranging from as low as 0.54% to as high as 2.33%.

Every contract year, Transitions Select II annuitants can withdraw up to 10% of their purchase payments without penalty. Anything beyond this allotted amount may be subject to the following withdrawal fees:

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7+
7% 7% 6% 5% 4% 3% 0%

The IRS levies a hefty 10% income tax penalty on withdrawals from an annuity before you reach age 59.5. You’ll also be on the hook for standard income taxes.

Realistic Return Expectations

Annuities that come with a fixed rate earn interest based on a prespecified percentage each year. But with a variable annuity, returns are fully dependent on the investment decisions of the annuitant and the performance of those investments. In the case of this annuity, five-year fund returns range from -3.27% to 12.02% as of June 2019.

RetireEase

MassMutual’s RetireEase single premium immediate annuity (SPIA) offers income to annuitants for either the rest of their life; a predetermined period of time; or some combination of the two. Should you choose the third option, you’ll receive payments for a certain number of years, and if you pass away before that time period is up your beneficiary will assume the rest of your payments.

When you’re ready to start earning income, MassMutual allows you to decide between monthly, quarterly, semi-annual or annual payments. To open this annuity, you must be 90 years old or younger and have $10,000 ready to invest.

Fees

You will not need to worry about annual contract fees with the RetireEase SPIA. MassMutual has implemented surrender fees, though, if you withdraw more than 10% of your purchase payments.

Withdrawal Fee Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10+
N/A 8% 7% 6% 5% 4% 3% 2% 1% 0%

The IRS will charge you a 10% income tax penalty if you withdraw funds before reaching age 59.5.

Realistic Return Expectations

The returns you'll see on an immediate annuity are dependent on a number of factors that are strictly personal to you. This includes how much money you decide to invest, when you invest it, what type of annuity option you select and how long you live.

Retirement Income Tips

  • A financial advisor can be a big help in choosing annuities and figuring out how they fit into your retirement income plan. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • When you’re planning what your income will look like in retirement, don’t forget to take into account Social Security payments. If you don’t know what you’re in line to receive from Uncle Sam, check out our Social Security calculator.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map allows you to see the best counties for small business owners in the country and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Least
Most
Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for owners of small businesses? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of people reporting small business income compared to the total tax-filing population of the region. Next we compared the total amount of small business income to the total amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the businesses' owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can have a large effect on a small business's success. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with a higher small business index are better for small business owners.

Sources: Internal Revenue Service (IRS), US Census Bureau 2017 American Community Survey, Government Sources, SmartAsset