A fixed-rate annuity has a stated rate of return and no loss of principal due to market downturns. In most cases, it allows the owner to earn higher interest than bonds, money markets, CDs and other bank products. The investment grows tax-deferred, which means you will not have to pay taxes on the interest until you withdraw money from the annuity. However, withdrawals from a fixed annuity before the age of 59 ½ may be subject to a 10% federal tax penalty.
Benefits of a Fixed Annuity
Guaranteed return — Guaranteed minimum rate of return for a specific timeframe.
Tax-deferred income growth — Your investment will grow tax-deferred until you take a withdrawal.
Principal protection — There is no market risk with a fixed annuity. Your principal is protected and guaranteed to accumulate at a fixed rate.
Liquidity — Fixed annuities provide some liquidity, typically 10% of the contract’s accumulated value is available penalty-free on an annual basis if you are over 59 ½, and some fixed annuities allow you to withdraw the interest on an annual basis.
Schedule a Meeting to Learn More About Multi-Year Guaranteed Annuities
If you are looking to create income for your retirement years, contact Safe Harbor to learn more. We offer a complimentary consultation to review your existing retirement plans and can provide an investment strategy that will provide the money you need to live comfortably in your golden years. Contact our office or give us a call at (614) 760-0670 to schedule your initial consultation.
Annuities are designed to be long-term investments and frequently involve charges such as income and death benefit rider fees and surrender charges. Early withdrawals may impact annuity cash values and death benefits. Taxes are payable upon withdrawal of funds. An additional 10% IRS penalty may apply to withdrawals prior to age 59 1/2. Annuities are not guaranteed by FDIC or any other governmental agency and are not deposits or other obligations of or guaranteed or endorsed by any bank or savings association.