Fixed Annuity
A Fixed Annuity is an insurance contract providing guaranteed growth at a fixed interest rate, similar to a CD, offering tax-deferred accumulation and a predictable income stream in retirement, making it ideal for risk-averse individuals seeking financial security against market volatility. You fund it with a lump sum or payments, and the insurer guarantees a rate (often for years) and then provides regular, fixed payments for a set term or life, with guarantees backed by the insurer's financial strength.
Key Features & Benefits
- Guaranteed Returns: Offers a fixed, guaranteed interest rate, protecting against market downturns.
- Tax-Deferred Growth: Taxes aren't paid on earnings until you start receiving payments.
- Predictable Income: Provides a steady, reliable income stream for retirement.
- Death Benefit: Often includes a provision to pass remaining funds to beneficiaries.
A Fixed Annuity provides investors with a tax deferred interest rate guaranteed for the life of the contract. Fixed annuity rates are often higher than what you can get from a CD or savings account, offering low risk for higher returns and with no annual fee. Unlike CDs or savings accounts though, fixed annuities are not FDIC insured. They are guaranteed by the issuing insurance company. Fixed annuities are the most basic type of annuity contract as they offer a consistent and dependable source of investment return and income.
LPL Financial has agreements with the strongest and highest rated Insurance carriers in the world. The only way they can be on our platform is if they are rated A or better. Our clients always come first so it is imperative that every insurance company honors their core oblations to provide the promised dividend and income stream while managing the risk of the annuitant outliving their savings, and always backed by strict state regulations requiring suitability and transparency.
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Fixed Annuities (FA) are not suitable for all investors. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Withdrawals prior to 59 ½ may result in an IRS penalty, and surrender charges may apply. Guarantees are based on the claims-paying ability of the issuing insurance company.