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A Fixed or Variable Annuity: Which is Right for Me?George has maxed out his savings in all other forms of tax advantaged accounts – he has contributed the limits in both his IRA and his 401k for the year. He has some leftover savings, and is considering an annuity. But which type of annuity should George buy? Ruling out an immediate annuity because he is nowhere near retirement, George is then faced with choosing between a fixed annuity and a variable annuity. George starts doing some research and begins weighing his options. Like all annuities, a variable annuity offers taxed deferred growth. George notes that, with a variable annuity, he’ll be responsible for monitoring where the money will be invested. Although when he was younger George was quite the savvy and involved investor, lately he’s become tired of playing the market. Gains can be higher with a variable annuity, but as George researches further he realizes that there is also a higher risk potential. The fixed annuities George looks at offer a fixed rate of return. While the interest rate isn’t the highest he's ever seen, he is comforted by the fact that the rate won’t change during the guarantee period – and he will never lose any of his original principal or any accumulated interest earnings. Also, many of the fixed annuities George looked at offered upfront bonuses, which would give him a little more money to start with than he originally planned. Right now, what George cares about most is security. He can see retirement looming on the horizon and wants to ensure that his money will be there when he needs it. With this in mind, George decides that he’ll purchase a 10-year fixed annuity paying a competitive interest rate. For George, the high security offered by a fixed annuity outweighs any of the supposed gains that a variable annuity could offer. Are you in the same situation as George? If you are weighing your annuity options, call the Annuity Specialists at 1-800-239-0356. They’ll offer a free, personalized recommendation of the annuity product that’s right for you.
¹ First year yield/rate reflects fixed rate plus premium bonus or interest rate enhancement. Interest is based on current rates and subject to change without notice.Send email to
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