With a fixed annuity, you receive guaranteed income payments. You provide a specified amount to the annuity provider. In turn, you receive a fixed amount, no matter what other investments are doing.
A fixed annuity is often a safe choice for you to accumulate cash with tax-deferred interest.
You receive a steady income guaranteed by the insurance company as your principal with a minimum interest rate.
You can choose a fixed annuity with payouts over a single lifetime or for a specific number of years. You could also choose a single lump sum payment.
Should You Consider a Fixed Annuity?
A fixed annuity works well for conservative investors, especially when you are planning for your retirement. The predictable income provides security and stability.
Plus, you can preserve your principal while your money grows faster than if you just let it sit in a savings account or purchase a CD.
Unlike other investments, a fixed annuity will not link to how the stock market performs or any other investment. So, your money grows at the guaranteed rate the insurance company sets for your annuity.
You receive more than you would if you parked the funds in a savings account or other safe investment. The insurance company pools your contribution and invests in government securities and high-earning corporate bonds. On these larger investments, the insurance company earns a higher rate for you.
Check your fixed annuity, because some lock in the same rate of return for the entire length of your contract. While others adjust the rate at specified times in the term.
In addition to guaranteeing your minimum rate of return, your fixed annuity has a guarantee on your entire principal. This safe investment makes sure you never lose your hard-earned cash! This is why this type of investment is so popular as part of a retirement financial plan.
After a specific time, your fixed annuity requires renewal. Then, a different interest rate, the renewal rate, is your new rate of return. But even when interest rates change, your fixed annuity rate cannot fall below your guaranteed minimum rate in the contract.
Contact us for more information about Fixed Annuities.