Why Fixed Annuities Are Advantageous

As time has passed, financial products have changed and gotten better. Financial institutions are constantly working to develop new products that will give them a competitive edge against other companies. The market nowadays is flooded with too many new, flashy products that are really untested in the long run. Fixed annuities have stayed the same throughout the years and are not often overlooked. But if you are looking at investment vehicles, then you should not overlook a fixed annuity.

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How money works is governed by basic economical and physical laws. In an attempt to appeal to more clients and crush the competition, insurance companies hire mathematicians to tweak those laws, formulas and equations to create a product that looks like a new gold standard. In order to account for excess risk exposure, the fine print in the contract will usually make up for anything that seems too good to be true.

I am reminded of a great quote from Warren Buffett: “Beware geeks bearing formulas.”

Much more can be accomplished if an investor sticks with simple products and a better strategy. When push comes to shove, fixed annuities can perform as well or better for a solid retirement plan that any of those flashy indexed and variable products. A fixed annuity allows you to know exactly what to expect, so you know what you will be getting. There are no surprises or unhappy outcomes.

Fixed and immediate annuities have been around for longer than any other annuity product out there. And the reason for their longevity is that they have a proven history of working. It is possible that some of the new products will work, but as of yet, there is no way to tell. I don’t know anyone who would want to head into retirement not knowing for sure the product they are using will work It would be like taking a trip down the Amazon river and expecting some one else to wear your life jacket for you; it just doesn’t make sense.

So what is so good about Fixed Annuities? I’ll list a few things.

Competitive Interest Rates- Fixed annuities offer rates that exceed bank CD rates and treasury yields. Plus, fixed annuities have a guaranteed minimum interest rate, allowing you to know that no matter what happens, your account will always grow.

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2) Money Options. Now this may seem funny to have options when it comes to accessing your own money, but a lot of investment vehicles will penalize you for taking your own money out. With a fixed annuity, there are options that you can access your money without being charged for it. In addition, most products can be converted into guaranteed income for a specified period of years or for life, your choice. Two major leaders in the insurance and business industries, New York Life and Wharton Business School, conducted research and found that immediate annuities are the best way a person can maximize their retirement funds.

Safety- 2008 marked a disastrous year for the global financial markets. A lot of insurance companies avoided the turmoil because of extremely conservative management strategies. Insurance companies are expected, because of the nature of their business, to hold more cash in reserve than most regular financial institutions. And that is why most insurance companies are still viable and in business today. There is also the safeguard provided by each state. This is an insurance guaranty which insures any losses up to $100,000, similar to the FDIC.

Now, after talking about all the great things a fixed annuity has to offer, is there anything an investor needs to be aware of? Sure there is. But we shouldn’t talk about if a fixed annuity has a good a or bad side. What we should discuss is if this is the right investment vehicle for you. Fixed annuities will make sense for some people and for others they are not the right solution to their retirement needs. Depending on your age and retirement goals, timing is the key. Most people have the ability to benefit from using a fixed or immediate annuity during their retirement. However, if their timing is off, they may wish they never invested in it.

Most of the problems seen in the annuity market originate from salesmen who are not qualified enough. Plus, there are a lot of products that benefit the insurance company, but do not so as much for the investor. It is important to take the time to learn how to determine if a contract is good or not so good.

If a fixed annuity appeals to you, it is imperative that you find a qualified advisor. Talk with our advisors at AnnuityStraightTalk.com and they will guide you through the myriad of annuity and investment products, giving you the information you need to make the best informed decision. This might mean a little work from your end, but isn’t securing your retirement worth it?

Make an informed decision about annuities. Get the Free Annuity Report at www.AnnuityStraightTalk.com. – fixed annuities