The Basics of Fixed Annuities and Important Considerations

Fixed annuities are similar to certificates of deposit with a guaranteed interest rate for a specific period of time./nSafety of the insurance company, ratings, surrender charges, and duration of interest rate guarantee are important considerations for fixed annuities./nEnsure that the interest rate matches the surrender charge duration to avoid a significant decrease in interest rate./nAnnuities are recommended for individuals aged 59 and a half or older to avoid penalties./nAnnuities allow tax deferral on interest, similar to retirement accounts./nWithdrawal penalties of 10% apply for amounts exceeding the 10% limit before the age of 59 and a half.