per your contract
How Does a Fixed Annuity Work?
Fixed annuities may be worth considering if you are looking for a way to add stability and predictability to your retirement strategy.
When you purchase a fixed annuity, you give money to an insurance company in exchange for contractual benefits.
The insurance company credits interest to your annuity according to the terms of your contract. The interest rate may be guaranteed for a specific period or may change according to the contract's terms.
At a later date, you may have options for receiving your money, including taking withdrawals or turning the annuity into a stream of income.
Because every annuity contract is different, it's important to understand the details before making a decision.
complement your plan
Why Consider a Fixed Annuity?
A fixed annuity may offer benefits that can complement other retirement savings and income sources.
Predictable Growth
Fixed annuities can provide a stated interest rate or a rate that is guaranteed for a specific period, depending on the contract.
Tax-Deferred Growth
Interest earned inside a non-qualified annuity generally grows tax-deferred. You typically don't pay taxes on the earnings until you withdraw the money.
Retirement Income Options
Depending on the contract, an annuity can provide options for creating a predictable income stream during retirement.
Protection From Market Downturns
Fixed annuities generally are not directly invested in the stock market. This means the value is not subject to the same day-to-day market fluctuations as stocks or mutual funds.
to understand first
Is a Fixed Annuity Right for You?
A fixed annuity isn't right for everyone. Your age, financial goals, income needs, tax situation, and access to other savings should all be considered.
It's also important to understand:
- How long your money may be committed
- Interest rates and how long they are guaranteed
- Withdrawal provisions and surrender charges
- Potential tax consequences
- Income options
- Fees or contract charges, if applicable
- What happens to your money when the contract owner dies
- The financial strength and claims-paying ability of the insurance company
Let Us Help You Understand Your Options
Annuities can be complicated, but understanding your options doesn't have to be.
At Southern Tides Benefits Consultants, we take the time to explain how fixed annuities work and help you understand the features, benefits, and limitations of the contracts you are considering.
Our goal is to help you make an informed decision that fits into your overall retirement strategy.