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Fixed Annuities Offer Special Benefits


Fixed annuity products can be a great financial tool for your retirement plan.  They have a lot of benefits to offer, especially for investors who are conservative.  Fixed annuities allow you to build your wealth and protect those assets while they are growing at a fixed rate of return.  Many people are still reeling from losing money over the past decade and are searching for safety and guarantees.  Fixed annuities can provide that security that people are looking for.  LifeHealthPro’s Rich Lane lists his “Top 5 reasons to buy a fixed annuity” in a recent article for the publication.  There has been recent market growth for both immediate and deferred fixed annuity products.  You have a range of payment option with a deferred fixed annuity, including a guaranteed income stream.  Your money isn’t taxed until you start receiving payments.  There aren’t many products out there that offer predictable and guaranteed income streams for your retirement.

The first reason the article listed for buying a fixed annuity product is because of its safety.  Your premium and interest are kept safe and spouses are protected with death benefits.  Your income stream will continue to pay your spouse in the event that you die before receiving all of your premium back.  This is also beneficial if one spouse enters into a long term care facility like a nursing home.  The author lists liquidity as the second reason for buying a fixed annuity.  Some annuity products are less liquid than others; most variable annuities do have surrender charges associated with them.  But a tumultuous market has people searching for products that are liquid.  Fixed annuities are important because they allow you to create an income stream when you are ready for it and offer more flexibility than some other annuities.

Tax deferral is another important benefit of fixed annuity products.  Your money is not taxed until you start receiving income or take a withdrawal from your annuity.  You actually have the advantage of triple compounding on your earnings because you earn interest on your principal, interest on that interest and overall interest.  Fixed annuities also offer control over your future income stream.  You can choose the type of income stream that works best for your financial plan.  There is also the option to choose lifetime income payments that will guarantee your income stream for the rest of your life.  Wealth transfer is the final benefit listed in the article.  Many people are very worried about what will happen to their money after they die.  Your estate can avoid probate court on annuities, so they don’t have to waste time and money on extra costs.  As long as you have listed beneficiaries, they will receive your death benefits without hassle.

Fixed annuity products offer a number of benefits to those looking to protect their assets and create income for retirement.  Speak with an annuity expert if you have any questions about the benefits or limitations of fixed annuities.

Written by Rachel Summit

Follow Rachel, aka Finance Mama, on Twitter and Google+

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