Fixed Annuities
Fixed annuities are essentially CD-like investments issued by insurance companies. Like CDs, they pay guaranteed rates of interest, in most cases higher than bank CDs.
Fixed annuities can be deferred or immediate. The deferred variety accumulate regular rates of interest and the immediate kind make fixed payments – determined by your age and size of your annuity – during retirement.
The convenience and predictability of a set payout makes a fixed annuity a popular option for retirees who want a known income stream to supplement their other retirement income.
Fixed annuities pay guaranteed rates of interest, which makes them appealing to investors wary of potential loss with other products. What also makes them appealing are their low investment minimums – usually $10,000 to $50,000 – and the fact that the interest is tax deferred.
If you worry about finances in retirement, a fixed annuity can help you sleep at night. Because of their stability, fixed annuities might be well suited to those who want to make sure their money will be enough to carry them through retirement, and at least cover the bare minimum of fixed expenses