Fixed Annuity Rates – Four Benefits of Fixed Rate Annuities
There are many reasons why fixed rate annuity products have become such a popular retirement savings vehicle for retirees and pre-retirees seeking to secure a reliable and guaranteed supplemental income for their entire lifetime; here are just four of those reasons:
1) Competitive Interest Rates – Fixed rate annuities offer competitive interest rates, as well as flexibility. With some fixed rate annuity products, you can “lock-in” a guaranteed interest rate for a specified period of time, typically 3-10 years. These are commonly referred to as multi-year guarantee annuities.
2) Tax Deferred Growth – A fixed rate annuity can offer tax relief. One of the key benefits of fixed rate annuities is that your money accumulates tax-deferred – you won’t pay taxes on your interest earnings as long they are left to grow and compound inside the annuity contract. Taxes on your interest earnings are deferred until withdrawal, which you control. This benefit may allow your money to accumulate faster than it would in a comparable, currently taxable product, such as a bank certificate of deposit (CD).
3) Guaranteed Death Benefit – A fixed rate annuity offers the security of a guaranteed death benefit, backed by the claims-paying ability of the insurer, which passes to your named beneficiary free of the costs and delays of probate.
4) Lifetime Income – If outliving your savings is a concern, fixed rate annuities could be the solution. You can arrange to receive a steady stream of periodic payments for the rest of your life, or for the joint lifetime of you and your spouse.
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