A fixed annuity is an insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both interest earnings and premium payments. The guarantee is based on the insurance company’s ability to pay.

If you are more of a conservative investor, a fixed annuity may appeal to you. Fixed annuities offer steady, guaranteed growth. Fixed annuities also offer tax-deferral to help your money grow faster and a lifetime income option to keep your retirement secure.

Fixed annuities pay guaranteed rates of interest and can be deferred or immediate. The convenience and predictability of a set payout makes a fixed annuity a popular option for retirees who want a known income stream to supplement their other retirement income.

How does a fixed annuity work?

Your premium payments earn a guaranteed interest rate for a set period of time. At the end of the period a new fixed rate becomes effective, based on current interest rates. Earnings are not taxed until withdrawn. Withdrawals of taxable amounts will be subject to income tax, and prior to age 59 1/2, a 10% federal income tax penalty may apply. You also have a choice of payout options, including lifetime income.

If you would like more information about traditional fixed annuities, please call Kades-Margolis at (800) 433-1828, ext. 4. We will have one of our professional financial advisors contact you, or click on this link and fill out the e-form and submit.

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