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What
is the difference between a fixed
and variable annuity?
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Fixed
annuities pay a “fixed”
rate of return. When you
receive payments, the monthly
payout is a set amount and
is guaranteed. Fixed annuities
may be a good choice for:
- Conservative investors
who value safety and
stability.
- Those nearing retirement
who want to shelter
their assets from the
volatility of the stock
or bond market.
With variable annuities,
you can invest in a variety
of securities including
stock and bond funds. Stock
market performance determines
the annuity's value and
the return you will get
from the money you invest.
The amount of risk you are
willing to assume should
influence the kind of funds
you select.
You may want to consider
a variable annuity if you
are:
- Comfortable with fluctuations
in the stock market
and want your investments
to keep pace with inflation
over a long period of
time.
- Young and want to
prepare financially
for retirement by reaping
the gains in the stock
or bond market over
the long term.
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