A fixed annuity is a contract with an insurance company that protects your principal and pays a guaranteed rate of interest for a set period. It's one of the simplest, most predictable retirement tools.
This cornerstone guide explains how fixed annuities work, their benefits and trade-offs, and who they tend to fit.
What a fixed annuity is
The basic contract: your principal, a guaranteed rate, and a set term.
How guaranteed interest works
How rates are set and credited, with guarantees subject to the insurer's claims-paying ability.
Accessing your money
Surrender periods, free-withdrawal provisions, and liquidity considerations.
Pros and cons
The trade-offs between safety, growth potential, and access.
Who fixed annuities fit
The savers and retirees who tend to benefit most.
This guide is for general educational purposes only and is not financial, tax, or legal advice. Tim Hartle is an independent insurance professional. Annuity guarantees are subject to the claims-paying ability of the issuing insurance company and are not FDIC insured. Rules and product features vary by situation and by state. Please consult a qualified advisor about your own circumstances.