Is A Fixed Income Annuity Right for You?

27
Sep

Is A Fixed Income Annuity Right for You?

In today’s low-interest-rate environment, there are fewer fixed income alternatives for retirees seeking income. With rates on traditional staples such as CDs and money market accounts at or near all-time lows. Fixed-income annuities are an alternative to consider for retirees seeking income and safety. The issuing insurance companies back the claims-paying ability of all annuities. Once thought of as only a standalone retirement income solution, a fixed-income annuity is now commonly recognized as one of many components of a retirement portfolio.  

Here’s why:

  • Annuities protect during times of market decreases; withdraw from the annuity to avoid liquidating other accounts at low share prices.
  • Fixed-income annuities purchase a one-time payment or period purchases. Contracts are purchased directly from the insurance company or a financial institution.
  • Fixed-income annuities can be immediate, meaning payments commence at once or deferred with payments starting at a later date. Payment options can vary, including monthly or quarterly.

The advantages of a fixed income annuity include:

  • A guaranteed stream of lifetime income now or in the future.
  • Also can be a way to add a fixed-income component to your retirement portfolio.
  • You can structure a fixed-income annuity to provide income for your remaining life and the life of your spouse.
  • As a result, the insurance company guarantees the payments.
  • They can provide pension-like payments for those with no actual pension.
  • Therefore you won’t outlive the payments.

Not all fixed income annuities are created equal or are all the providers of these products. We can help you decide if a fixed income annuity is right for your situation, and if so, which product is the best for your unique situation. Why not give me a call to discuss your financial situation and to see if a fixed income annuity makes sense for you?

Additional Disclosure

Withdrawals are subject to ordinary income tax and, if taken before age 59 ½, a 10% federal penalty.  They will reduce the contract value and other benefits under the contract.  Withdrawals that exceed any free withdrawal amount during the surrender period will be subject to a surrender charge.

Additional Disclosure

These are the opinions of the author and not necessarily those of the Registered Investment Adviser or Broker/Dealer. They are for informational purposes only. Do not be construe or act upon these opinions as individualized investment advice.

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The Fulshear Wealth Management Group. specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. Whether you have a retirement nest egg of five million dollars or $50,000, we can help you make sure it works as hard and as smart as you did in earning and saving it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!