If you’re looking to increase your tax-deferred savings for retirement with lower-risk investments and are comfortable with conservative returns, consider a fixed annuity. Compare Annuities
A fixed annuity allows you to invest for retirement with a fixed rate of return, and not pay taxes until you withdraw your money. A fixed annuity might be appropriate for you if:
- You have a lower risk tolerance or want to invest a portion of your retirement portfolio more conservatively.
- You want a guaranteed rate of return without market risk.
- You expect to be in a lower income tax bracket after you retire.
- You expect to begin withdrawing these funds after age 59 1/2.
- You are in your 60s or 70s and are preparing for or are in retirement.
How it works
You purchase an annuity with a specified rate of return and, at retirement, you have the option to convert your assets into a guaranteed stream of income.
With some fixed annuities, you have the ability to add to your investment at later dates.
- Additional tax-deferred savings opportunity, even if you’ve maxed out your 401(k) plan or Individual Retirement Account (IRA).
- Fixed rate of return, so you know up front how much your investment will earn, and you avoid market fluctuations.
- Typically no fees — all of your money is invested.
- Contingent deferred sales charge (CDSC) that declines to zero over a set period of time.
- May include surrender penalties for early withdrawal.
- Potential tax penalties for withdrawals before age 59 1/2.
- Consult your tax advisor about other possible tax implications.
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