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Financial Focus: FIXED ANNUITIES

By June 29, 2009No Comments


Fixed Annuities:

  • Provide Guaranteed return
  • Provide Tax Deffered Earnings (thus yeilding better return than CD’s)
  • Are NOT tied to the stock market
  • Do NOT have contribution limits
  • Can provide Lifetime income

With the current economic status not only in our nation, but worldwide, many people have found that their retirement accounts are falling short of their expectations. A fixed annuity is a conservative piece of your retirement planning.

To describe the benefits of a fixed annuity, you must first understand the difference between a speculative investment and guaranteed return. A speculative investment, like stocks and mutual funds, has the potential for both loss and gain. While a guaranteed return has only the possibility for gain.

A fixed annuity is a guaranteed return product. It’s very much like a CD (certificate of deposit), except your earnings are tax deferred, therefore, yielding more than most CD’s. On Average, people commit to an annuity investment for 5 to 10 year periods. An annuity can also provide lifetime income so you don’t outlive your retirement. Unlike other retirement programs, you aren’t penalized for living a long life. You may even choose a payout that benefits a spouse or other beneficiary.

Now, more than ever, building and holding onto your retirement savings is critical. With a fixed annuity, the money you invest will always be there when you need it. I like this product because I never have to make a phone call to tell my client that they’ve lost money. In the past two years, many of my clients have called to thank me for this conservative approach, when many of their friends have lost half of their retirement in the stock market. If you have money that you can invest for 5 years or more, this may be the way to go.

For more information on Fixed Annuities, please feel free to call my office at 805-781-6336 and speak with Scott Engle.

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