Fixed Annuities
Best Guaranteed Interest Rates
Prior to 1952, the only type of annuities available for purchase and inclusion in a retirement plan were fixed annuities. These annuities involve entering into a contract with an insurance company that then will guarantee a return on your invested principal plus a set, fixed interest rate. These investments are considered almost as safe as investing your money in a certificate of deposit (CD).
Like we mentioned under variable annuities, fixed annuities allow you to defer paying taxes on any income that is currently invested and when it is distributed at the set contract dates you only have to pay your regular income tax rates, instead of higher rates that can come with other investments.
Many annuities can have complicated rules and restrictions. For example, you may receive five percent interest for the first year or two, but then only three percent for the years following that. Don’t worry about trying to find the best annuities and having to read all the fine print. At Income for Life, we’ve already dug into the fine print for you!