A fixed annuity is a way to help pensioners to be better prepared for their retirement as a stabilized income which comes from investments. These investments are usually made by those about to retire, or by those who have retired already, and generally these contracts are fixed through an insurance contract which offers a set rate of income at regular times over an extended period of time. There are benefits and cons to utilizing fixed annuity rates and quotes, but a fixed annuity can also be added to by different options to change the makeup of the investment ever so slightly.
How They Are Purchased:
Fixed annuity rates and quotes are obtained through insurance companies, banks, and other financial institutions in one large payment. Usually cash is used, but payments can be made over time while the investor is working, before the payouts begin. This invested money is guaranteed with a fixed rate of the amount which will be returned over the phase during which accumulation of the investment takes place. Less payments are made during the annuitization period, although many investors of this kind don't always live long enough for the full number of payouts, which is why a spouse or dependent can receive the money in the event of a death.
Before Selecting Your Annuity:
There are many annuity rate calculators and comparison tools that can help you find the best fixed annuity rates and quotes for you. You should know that annuity is something that you can change through negotiation before you sign the contract for the fixed rate. This means that you don't just have to take whatever number the bank throws at you, you can haggle a little bit here and there to find a number that suits you both.
Types Of Fixed Investments:
There are different fixed annuity rates and quotes that you can take advantage of, these are called life annuities and term certain annuities. The first pays a certain amount at set intervals until the investor passes away while a term certain investment pays a certain amount of money each month until the investment expires. Sometimes this can be before death, but other times it may still outlive the annuitant.
There are other types of fixed annuity rates and quotes to wade through when making your decision, including registered and unregistered annuities. How much money you earn from your investment is tax deferred, but sometimes they are purchased either with money that has already been taxed or pretax income. Whether your income is pretax or after-tax will make a difference, and provide you with your deferred state. Whether you have a qualified or unqualified annuity if you pass away, your next of kin will owe on the investment income, this is one reason why you should always speak to a financial representative before making investments that you are not knowledgeable about. If you consult with a specialist you will gain more insight on how to avoid leaving beneficiaries with large debts on your behalf.