Fixed Annuity Retirement Advantages
With so many retirees experiencing so much uncertainty in today’s volatile economic environment, it is important to know that a fixed annuity offers secure retirement options not found in CDs, money markets, mutual fund^s, stocks, bonds and other securities.
Fixed Annuity Benefits
- Safety: Backed by highly rated state regulated insurers
- Tax Deferral: Tax-deferred growth
- Higher Return: Better interest rates typically than CDs
- Life Insurance: Death payout **guarantee options
- Liquidity: Flexible withdrawal privileges
- Unlimited Contributions, unlike IRAs and 401(k)s
- Inheritance: Pass money directly to heirs by passing probate
- Lifetime Option: Income you can’t outlive (Annuitization or a Living Benefit Rider)
Fixed Annuity Characteristics
- Lump-sum or periodic contributions
- Invested in mostly high quality A-AAA bonds
- No risk to client. Insurance company assumes all risk
- Guaranteed interest
- Modest growth
- 2% to 6% interest crediting possible
- 1- to 15-year term
- Predictable, simple
- Guaranteed retirement income
- No annual fees
Fixed Annuity Features Summary
All deferred fixed anuities have no income tax requirement on interest earnings until withdrawal. This is a definite advantage over many investments like CDs, mutual fund^s, stocks and bonds when considering a long term retirement investment. A long term fixed annuity investment may out perform CDs, bonds and treasuries. Reinvesting money that would otherwise be paid out in tax over an extended period of years is always an advantage. In addition, fixed annuities have several benefits that may be important for retirement planning.
Question:Who regulates fixed annuities and life insurance companies?
Answer: Each state regulates the insurance industry transacting business in their respective state. For the most part, each state conforms to a uniform code of regulation that is mostly the same from state to state.