Buying a Fixed Annuity

While you can purchase a fixed annuity at one point in your, it’s often advised that you wait until you’re closer to retirement. Regardless of when you make this decision because annuities are meant to protect your money and secure future income, you need to be certain that you purchase your annuity only from a reputable provider.

Annuity providers can include;

• Insurance companies
• Independent broker-dealers like Raymond James
• Mutual fund companies like Vanguard
• Large, national banks, such as Bank of America
• Independent agents, brokers, and financial advisors

When buying a fixed annuity and selecting the annuity company whom you’ll be working with, pay attention to the following factors;

• Rating from an independent rating company including Standard & Poor’s, Fitch, AM Best, or Moody’s
• The financial strength of the provider
• Online reviews
• Minimum guaranteed return
• Fees, such as surrender or annual fees
• Death benefits

After you’ve chosen your provider, you’ll want to consider the terms of the contract. If you’re looking for a predictable investment return, guaranteed minimum rate, tax-deferred growth, and assured income, then a fixed annuity is right up your alley.

Don’t forget to assess your financial needs.

You should also assess your current and future financial needs. Why? Because this will help you determine if you want cash now or for later. Do you need the annuity to pay out sooner than later? Then you’ll want an immediate annuity. If you can wait, then go with a deferred annuity.

If you do decide on a fixed annuity, be aware that you don’t have any say in how your money is invested as it’s completed managed by the annuity provider.

And, one more thing. Make sure that there’s a free-look period. This is when the provider gives you 10 to 30 days to give the annuity a test drive. If it’s not to your liking, you reject the annuity and receive a full refund.