How Fixed Annuity Can Act As A Good Source Of Income For Retirees

By Author: Robert Cook
Total Articles: 111
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Now it’s time to put an end to your work life and spend some time with families and near ones. However, the thought of regular income being stopped will keep worrying you until you take help of a potential retirement policy. So, are you planning for pensions? Well, if it’s yes, it’s advisable not to go for it since you won’t be able to lead a luxurious postretirement life. Now, if you wish, you can always take pension provided you chalk out a prospective plan in addition or otherwise your long investment future plans might remain unfulfilled. So, you can always go for fixed annuity.

Do you know what an annuity is? It’s a lucrative investment policy where you are asked to draw a contract with an insurance company and initially provide a lump sum to the same. In substitution, you will get a fixed income for lifetime. Now, you might raise questions as to how it’s going to be a fixed income. Well, prior to signing the agreement, you will asked by your insurance agent to choose the time period based on which you will receive your payments. This means that you can take the payment weekly, quarterly, ...
... monthly and annually at a ‘fixed’ rate of interest. However, the principal will act according to your chosen time period.

Coming to fixed annuity, they can be qualified, non-qualified, deferred or immediate. The biggest advantage of fixed annuity is that its interest rate remains fixed and do not fluctuate like variable annuities. Fixed annuity is just like a Certification of Deposit (CD) or savings account. Here the growth of the principal is dependent on the interest adding to it.


With an income annuity, a retiree can grow even richer with time. However, the money once given to the insurance company can never come back. This means that once the annuitant dies, the payments will end and your spouse will be probably left with nothing. So, it’s very important to live well so that you can exceed your life expectancy. This can even help you receive good offers from your insurance agent.

Now, the one who invests in an income annuity and thereafter passes away in no time will get nothing because the insurance agency will keep his/her entire invested money. So, the annuitant must specify the name of his/her heir who will keep receiving the payments after your death. Well, if you think that it’s better to take advice from experts dealing in income or fixed annuity, you can do so via online.