What is a Fixed Annuity

Think of a fixed annuity as a pure annuity that invests your accumulated contribution in some low-risk assets.

Under a fixed annuity contract, you contribute money into the annuity (in installments or in a lump sum). The amount that you have contributed yields a fixed rate of return. There are features that allow the rate of return of your annuity to fluctuate according to the inflation rate or rate of return of other low-risk assets. A fixed annuity provides a relatively stable rate of return with a relatively low level of risk comparable to a CD. Most fixed annuities offer survivor benefit features along with potential tax advantages as well.   

Both Fixed and Variable Annuities can be tax qualified or non-tax qualified.  The tax-qualified annuities can be used for IRA, 403B, 401K and other tax qualified plan rollovers.  Non tax-qualified annuities can compound tax deferred with after tax dollars.

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Content is for informational purposes only and may not accurately reflect your specific situation. Information is not intended to provide legal, tax, or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances.