Discover Fixed Rate Deferred Annuities

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About Roy Snarr

CFF®, CLTC®, LACP, NSSA®
“Throughout my career I have helped hundreds of families and business owners create strategic plans that identify personal and business goals. I make it my priority to deliver beyond my client’s expectations by helping them strategize the best solutions based on their needs.” Roy Snarr My dedication and passion has enabled me to build a successful and recognized business and to become a part of the most pristine association of financial professionals, the Million Dollar Round Table (MDRT). An international organization consisting of the top 1% of licensed financial professionals. As a part of my ever-growing financial education I serve as a local Board member for the Society of Financial Services Professionals (FSP). I hold an LACP designation; Life and Annuity Certified Professional.

If you’re looking for secure growth potential and guaranteed income during retirement, a fixed-rate deferred annuity could be a great addition to your financial portfolio. These insurance-based products offer a unique combination of benefits that may give you peace of mind regarding your future.

What is a Fixed Rate Deferred Annuity?

A fixed-rate deferred annuity is a type of contract that you purchase from an insurance company. In exchange for a lump sum payment (or a series of payments), the insurance company guarantees your contributions will grow at a fixed interest rate for a specified period. Additionally, your earnings grow tax-deferred, meaning you don’t pay any taxes on the growth until you withdraw funds.

How Does it Work?

Fixed-rate deferred annuities have two main phases:

  • Accumulation Phase: This is the period during which you make your premium payment(s), and your money grows according to the guaranteed interest rate. Depending on your needs and the terms of the annuity contract, the length of the accumulation phase may vary from a few years to many.
  • Annuitization Phase: During this phase, you have the option to convert your accumulated savings into a stream of income payments. There are various payout options, including payments that may last for your lifetime, ensuring you never outlive your retirement income.

Benefits of a Fixed Rate Deferred Annuity

  • Guaranteed Interest Rate: Unlike stocks or bonds, a fixed rate guarantees a minimum interest rate for your investment, ensuring a stable return regardless of market conditions.
  • Tax-Deferred Growth: Your earnings accumulate tax-deferred, boosting growth potential over time. This means more money working for you without the burden of current taxation.
  • Lifetime Income Option: Many annuities allow you to convert your savings into a guaranteed income stream in retirement. This may provide financial security and peace of mind.
  • Principal Protection: Fixed-rate deferred annuities offer principal protection, meaning your initial investment will be safe.
  • Death Benefit: Most annuities offer a death benefit, ensuring your beneficiaries receive financial support in case of an unfortunate event.

Who Should Consider This Product?

Fixed-rate deferred annuities are well-suited for individuals who:

  • Are risk-averse and want to protect their retirement savings.
  • Desire a guaranteed source of income in retirement.
  • Want to benefit from tax-deferred growth.
  • Prioritize safety over high-potential (but riskier) investments.

Things to Keep in Mind

  • Surrender Charges: Withdrawing your funds before the end of the surrender period often results in penalties.
  • Fees: Annuities may have associated fees depending on the product features.
  • Limited Liquidity: Once you enter the annuitization phase, accessing your funds may become more complex.

Is a Fixed Rate Deferred Annuity Right for You?

The suitability of a fixed-rate deferred annuity depends on your unique financial goals, risk tolerance, and time horizon. It’s always advisable to consult a financial advisor to determine if this product aligns with your overall retirement plan.

Fixed-rate deferred annuities provide a compelling combination of safety, growth potential, and guaranteed income options. If you’re approaching retirement or seeking ways to protect your savings, they are definitely worth considering.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

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Safe Money Guide – Annuity.com

About Roy Snarr

CFF®, CLTC®, LACP, NSSA®
“Throughout my career I have helped hundreds of families and business owners create strategic plans that identify personal and business goals. I make it my priority to deliver beyond my client’s expectations by helping them strategize the best solutions based on their needs.” Roy Snarr My dedication and passion has enabled me to build a successful and recognized business and to become a part of the most pristine association of financial professionals, the Million Dollar Round Table (MDRT). An international organization consisting of the top 1% of licensed financial professionals. As a part of my ever-growing financial education I serve as a local Board member for the Society of Financial Services Professionals (FSP). I hold an LACP designation; Life and Annuity Certified Professional.

View The Best Annuity Rates Available Now

Annuities are a safe and reliable investment. They can transform your savings into a more predictable income. Speak with one of our qualified financial professionals today to find out how an annuity can offer you guaranteed monthly income for life.

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Content in our posted articles is deemed to be accurate but topics, facts and laws can change. It is always a good idea to verify facts before making decisions. Always seek authorized and professional advice regarding financial decisions which includes investing, annuity purchases, tax planning, changes in a financial portfolio and retirement planning.

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