Fixed Annuity Retirement income, explained.
A set interest rate for the savings you do not need right away.
Fixed Annuity
A fixed annuity is a contract with an insurer that credits a stated interest rate for a defined period. It can help build retirement savings without direct market exposure. The rate may change after the guarantee period and access to your money is limited by the contract.
How this annuity works.
Is this for you?
Plain language answers.
No. A fixed annuity is an insurance contract and is not FDIC insured. Its guarantees rely on the insurer. Withdrawal rules and taxation differ from a CD.
Some contracts allow limited withdrawals without a surrender charge. Larger or early withdrawals can incur charges and a market value adjustment. Taxes may also apply.
Not necessarily. The initial rate lasts for the guarantee period. After that the contract sets the renewal terms and minimum guarantees.
Annuities are long term insurance contracts. Guarantees depend on the issuing insurer's ability to pay claims. Fees, surrender charges and withdrawal limits may apply. Taxable withdrawals before age 59½ may face an additional 10% federal tax. An annuity inside an IRA or other account with tax deferral provides no additional tax deferral. Product availability varies by state and carrier. This is general education, not personalized tax or investment advice.
Other annuity options to compare.
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