What are the pros and cons about fixed annuities?
I’m 45 years old, have a good retirement plan, but I need some information about fixed annuities. Annuities are tax-deferred investment vehicles offered by insurance companies. You will not pay income tax on your earnings until you actually start withdrawing money from the annuity, and then, you will never pay income tax on your principal if you purchased the annuity outside of an IRA (or other tax-qualified plan). Fixed annuities pay a fixed rate of return, and are “guaranteed” by the insurance company that issues the contract. However they offer no federal insurance protection against default. Most fixed annuities will pay a “guaranteed” rate for a set period of time, and then offer renewal rates at various intervals. The place for an annuity today comes in after you have made the maximum contribution to your 401(k) or 403(b) plan at work, and after you have fully contributed to a Roth (or Traditional) IRA if you are eligible. Then, if you have enough money on hand for emergencies an
