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Fixed Annuities

There are two basic kinds of annuities, variable and fixed annuities. Fixed and variable refers to the rates paid on the initial investment, which is the annuity. Fixed annuities are typically considered to be the safest as they guarantee the annuity policy holder a specific, fixed rate of return no matter what happens to the market. For this reason, insurance companies typically are very carefully about what they invest fixed annuities in, choosing only the most secure type of investments. The positive side for the investor is that there is very risk involved, with the obvious drawback being that rates are not terribly high over the short term as the investments tend to be very low risk paying moderate interest. Monthly payments are made that can start immediately or be deferred until a specific time such as retirement or a specific year such as a child turning 18 or 21. Fixed rate annuities can pay out of a specified amount of time or for life, allowing for the option to defer taxes.

Fast Facts

  • Most annuities will have a penalty of 10% charged by the IRS for any type of early withdrawal from the annuity program.
  • 58% of all annuity holders are currently retired.

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Results 1-5 of 55 for "fixed annuities"

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