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You are here: Home / Annuity Types / Online Annuity Rates and Annuity Quotes May 2025 / Fixed Deferred Annuities

Fixed Deferred Annuities

Fixed Deferred Annuity vs. Variable Deferred Annuities

All annuities other than immediate annuities have a characteristic known as deferral. The purpose of deferral is twofold. First, it refers to money being left in a savings-growth stage over a period of time, also referred to as the accumulation stage. Second, deferral refers to the tax characteristics of deferral allowing money to grow tax-free until it is withdrawn for income. Thus, an immediate annuity is neither deferred for savings-growth nor tax deferral and is therefore not considered a deferred annuity.

**Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. During this segment, Dick and Eric are referring to Fixed Annuities unless otherwise specified.

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So, what is the distinction between variable deferred annuity and fixed deferred annuity? It is very simple. Fixed is when the insurance institution assumes the risk for your principal and accumulation while variable is when you assume the risk for the underlying investments, principal and accumulation.

Fixed Deferred Annuity Characteristics

  • Deferred fixed annuities originated in the U.S. approximately 100 years ago
  • They can be acquired in periodic, systematic or lump sum payments
  • Deferral in fixed annuities allows the value of the annuity to increase
  • After deferral period, fixed annuity can produce more income
  • Deferred fixed annuities have the added advantage of tax deferral
  • They can be annuitized providing a lifetime of income
  • Deferred fixed annuities are mostly opposite of immediate annuities since immediate annuities begin income soon after they are purchased in a lump sum
  • Deferred fixed annuities are typically invested in high quality A – AAA government and investment-grade bonds with to the client
  • Fixed index deferred annuities are never invested into a market index; they are only using the index as a gauge to credit interest to the client
  • CD deferred fixed annuity refers to a type of annuity that has a multi-year interest **guarantee. Only bank-issued CDs are FDIC insured
  • Deferred fixed annuities are creditor-protected in most states
  • Deferred fixed annuities are first **guaranteed by the claims paying ability of the insurer and then each state has a State Insurance Guarantee Association (SIGA) with varying coverage limits
  • Check out our deferred fixed annuity calculator
  •  

    Fixed Deferred Annuity Summary

    All deferred fixed annuities  enjoy tax deferral with no income tax requirement until withdrawal. This is a definite advantage over many investments like CDs, mutual fund^s and securities oriented investments when considering a long term retirement plan. A long term fixed annuity investment may outperform 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, deferred fixed annuities have several benefits that can be important for retirement planning.

    Question: What are Ben Bernanke, the Federal Reserve Chairman’s primary personal retirement assets comprised of?

    Answer: Two deferred annuities!

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  ** Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Annuities are not FDIC insured and it is possible to lose money.
Annuities are insurance products that require a premium to be paid for purchase.
Annuities do not accept or receive deposits and are not to be confused with bank issued financial instruments.
During all video segments, Dick and Eric are referring to Fixed Annuities unless otherwise specified.


  *Retirement Planning and annuity purchase assistance may be provided by Eric Judy or by referral to a recommended, experienced, Fiduciary Investment Advisor in helping Annuity Guys website visitors. Dick Van Dyke semi-retired from his Investment Advisory Practice in 2012 and now focuses on this educational Annuity Guys Website. He still maintains his insurance license in good standing and assists his current clients.
Annuity Guys' vetted and recommended Fiduciary Financial Planners are required to be properly licensed in assisting clients with their annuity and retirement planning needs. (Due diligence as a client is still always necessary when working with any advisor to check their current standing.)



  # Investors should consider the investment objectives, risks, charges and expenses of a variable annuity and its underlying investment options. The current prospectus and underlying prospectuses, which are contained in the same document, provide this and other important information. Please contact an Investment Professional or the issuing Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.


  ^ Investors should consider investment objectives, risk, charges, and expenses carefully before investing. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.


  ^ Eric Judy offers advisory services through Client One Securities, LLC an Investment Advisor. Annuity Guys Ltd. and Client One Securities, LLC are not affiliated.


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