Fixed Annuities Provide Many Options For Retirees

Annuities are a form of policy issued by Insurance companies and offered through Insurance agents. The investor pays into the annuity, and after a set period of time, the annuity pays the investor returns. With fixed annuities, the principle is guaranteed. Annuities offer a safe, tax-deferred way to accumulate wealth, and are very popular as retirement savings plans.

Annuities can be structured in a number of ways; varying accumulation period, length of income payments and other factors. Investors get the security of a fixed income when they choose a "fixed annuity" option. Issuing insurance companies guarantee a minimum interest rate for a set period of time with a fixed annuity option. Most of the companies also pay a minimum benefit. Since the payout is fixed over a period of time, investors are aware of the expected income over the payout period.

A fixed annuity offers you a predictable rate of growth for your investments, and guaranteed future income. You won't experience the swings in value that you would see if you put the same money into the stock market. And, you have the choice to make one single upfront payment, or to make fixed payments over time.

Fixed annuities are paid out in different ways. One option is immediate payment annuities. This option allows individual investors to turn a lump sum into a stream of income because the annuity is paid out at a fixed monthly rate, beginning immediately.

Deferred annuities can be a useful tool to add to a retirement portfolio. The investor can choose to deposit a lump sum into the account where it will accumulate interest over time, or make periodic payments into it. After a set amount of time, the interest earnings are paid out. This is a form of fixed annuity.New retirees sometimes neglect to calculate their income requirements after leaving a regular paycheck. An income annuity can sometimes be the perfect solution.

- Nick Jameson