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What is a Fixed Annuity?

Fixed annuities are insurance contracts between the company and policyholder where the policyholder deposits a lump sum of money into and account and, the company guarantees a rate of return for a contractual guaranteed interest rate for a specific time period. Most commonly the specific time periods will be anywhere from 3 to as much as 10 years. Fixed annuities are often compared to Bank CD’s except these plans usually earn a higher interest rate and offer tax-deferred growth along with liquidity & probate court protection that CD’s cannot offer.

Individuals who choose to deposit their money into a principal-protected Fixed Annuity can rest assured knowing the exact amount of interest their annuity is going to earn and the exact amount of time their annuity will continue to earn the specified rate. Guaranteed Fixed Annuities are predictable retirement savings products because the issuing insurance company cannot reduce the interest rate during the guarantee period.

Fixed annuities are an excellent way to help grow your retirement dollars without worry about fluctuating insurance rates. A great option for those who want to ensure a steady stream of income during their retirement years. One of the main benefits of a fixed annuity is that it offers guaranteed returns, which means that you don’t have to worry about the ups and downs of the stock market. This type of annuity can also provide a guaranteed income for a specific period of time or for the rest of your life, depending on your needs.

They also offer protection against market volatility, which is especially important during times of economic uncertainty. Unlike other investment options, the principal and interest earned on a fixed annuity are protected, so you can rest assured that your money is safe. In addition to these benefits, fixed annuities can also offer tax advantages.

The interest earned on a fixed annuity is tax-deferred until you start receiving payments, which means that you can potentially save money on taxes. In conclusion, fixed annuities provide a range of benefits and protection that make them an excellent option for those looking to secure their financial future without risk. Contact our office for more information.

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