Fixed Annuities: Suitable?

What are fixed annuities?

Fixed Annuities are Tax-deferred retirement contracts issued by insurance carriers that pay a guaranteed interest rate (for a certain period) declared by the carrier.

Surrender charges of fixed annuities

Fixed annuities generally have surrender charges and often have market value adjustments on early withdrawals.

Who are fixed annuities suitable for?

Fixed annuities are generally suitable for long-term (+10 years), conservative investors who do not want to take market risk. The interest rates on fixed annuities are very low.

Higher net worth people and those seeking higher returns may not be suitable candidates for a fixed annuity. Think of Fixed Annuities as having an Iron-Clad Guaranteed rate of return for those that are least likely to want it before a period of 10 years.