Fixed Annuities

Here’s how they generally work:

1. Purchase: You pay a lump sum or a series of payments to the insurance company, which becomes your principal investment.
2. Accumulation Phase: During this phase, your principal earns interest at a fixed rate determined by the insurance company. The interest is typically credited on an annual basis and compounded tax-deferred until withdrawn.
3. Annuitization: At a predetermined date or upon your reaching a certain age, you can convert your accumulated value into a stream of income payments. This is known as annuitization. Depending on the terms of the annuity contract, the payments can be guaranteed for a specific period or for the rest of your life.

Fixed annuities offer several advantages:

• Guaranteed Income: They provide a predictable stream of income, which can be valuable for retirement planning.
• Principal Protection: The principal investment is usually protected, meaning you won’t lose money due to market fluctuations.
• Tax Deferral: Earnings on the annuity grow tax-deferred until they are withdrawn.

Fixed annuities can be a suitable option for individuals seeking a stable source of income in retirement, especially those who prioritize safety and predictability over potential higher returns. It’s essential to carefully consider your financial goals and needs before purchasing an annuity and understand the terms and features of the product you’re considering. Please Contact Us to discuss if fixed annuities are the right choice for your financial future.