Fixed Annuity

Secure your retirement future by investing with fixed annuities

By Gennifer Harding-Gosnell

A fixed annuity is one of the safest ways to save and invest money for retirement. You pay a premium or lump sum upfront now to guarantee yourself fixed-payment amounts for a specific time period in the future. Because a fixed annuity is tax-deferrable, using the money to invest in stocks and bonds can yield higher returns, or more money returned to you, in your retirement years.

There are four main types of fixed annuities to consider:

1. Equity-Indexed Annuity earns interest based on increases in the rates tied to the stock index of the annuity.

2. Market-Value Adjusted (MVA) Annuity allows early withdrawals subject to current interest rates at the time of withdrawal.

3. Single and Flexible Premium Annuity uses deposited money paid in one lump sum or in a series of scheduled payments.

4. Immediate Fixed Annuity offers payouts from the account immediately after purchase.

Investigate stock indexes when you consider an equity-indexed fixed annuity

Do your research online to determine what types of stocks and markets most appeal to you and your financial needs. Review equity-indexed fixed annuity information and rates with your financial adviser.
Try: Follow stock indexes and interest rates daily by subscribing to online easy-to-understand video programs offered by StockMarketVideo.com. Get web-based, real-time access to all the world’s markets through LiveCharts. Use the Fixed Annuity Calculator from CCH for fixed annuity help as you weigh out your options.

Determine your needs for early withdrawals from your fixed annuity

MVA fixed annuities do not penalize for withdrawing funds early, but that money is subject to the current interest rates available, be they higher or lower than the rate you orginially invested the money under.
Try: Charles Schwab offers a 3-10-year MVA Annuity with multiple benefits to purchase and valuable, fixed annuity advice. AIG also offers MVA fixed annuity information for its products.

Calculate fixed annuity payments and determine your best entry option

Fixed annuity purchases occur two ways: all at once or over a scheduled period of time. The amount of money you currently have in your possession and how much of it needs to be disposable for present use determines which payment option will suit your abilities.
Try: Navy Mutual offers military personnel annuities in single- and flexible-premium payments. Visit Lincoln National for more information on the Flex Fixed Annuity.

Consider immediate fixed annuities, if you are close to retirement

The least complicated fixed annuity formula is the immediate annuity, which begins payouts as soon as you purchase the account. There are less rate calculations, less terms to adhere to and less account management required with this type of fixed annuity.
Try: MetLife’s MAX Income Immediate Fixed Annuity is one of its most popular products. Get an online quote on immediate annuity products offered by FSD Financial Services.

People who don't want to face steep penalties for emergency withdrawals from 401Ks find fixed annuities to be a more flexible option. Fixed annuities are the best investments for people who consider themselves conservative investors and want to have their future fixed income guaranteed. A fixed annuity formula is available for every type of investor wanting to play it safe.