Roy Snarr


Snarr Financial & Insurance Services, Inc.

Discover Fixed Rate Deferred Annuities

If you're looking for secure growth potential and guaranteed income during retirement, a fixed-rate deferred annuity could be a great addition to your financial portfolio. These insurance-based products offer a unique combination of benefits that may give you peace of mind regarding your future.

What is a Fixed Rate Deferred Annuity?

A fixed-rate deferred annuity is a type of contract that you purchase from an insurance company. In exchange for a lump sum payment (or a series of payments), the insurance company guarantees your contributions will grow at a fixed interest rate for a specified period. Additionally, your earnings grow tax-deferred, meaning you don't pay any taxes on the growth until you withdraw funds.

How Does it Work?

Fixed-rate deferred annuities have two main phases:

  • Accumulation Phase: This is the period during which you make your premium payment(s), and your money grows according to the guaranteed interest rate. Depending on your needs and the terms of the annuity contract, the length of the accumulation phase may vary from a few years to many.
  • Annuitization Phase: During this phase, you have the option to convert your accumulated savings into a stream of income payments. There are various payout options, including payments that may last for your lifetime, ensuring you never outlive your retirement income.

Benefits of a Fixed Rate Deferred Annuity

  • Guaranteed Interest Rate: Unlike stocks or bonds, a fixed rate guarantees a minimum interest rate for your investment, ensuring a stable return regardless of market conditions.
  • Tax-Deferred Growth: Your earnings accumulate tax-deferred, boosting growth potential over time. This means more money working for you without the burden of current taxation.
  • Lifetime Income Option: Many annuities allow you to convert your savings into a guaranteed income stream in retirement. This may provide financial security and peace of mind.
  • Principal Protection: Fixed-rate deferred annuities offer principal protection, meaning your initial investment will be safe.
  • Death Benefit: Most annuities offer a death benefit, ensuring your beneficiaries receive financial support in case of an unfortunate event.

Who Should Consider This Product?

Fixed-rate deferred annuities are well-suited for individuals who:

  • Are risk-averse and want to protect their retirement savings.
  • Desire a guaranteed source of income in retirement.
  • Want to benefit from tax-deferred growth.
  • Prioritize safety over high-potential (but riskier) investments.

Things to Keep in Mind

  • Surrender Charges: Withdrawing your funds before the end of the surrender period often results in penalties.
  • Fees: Annuities may have associated fees depending on the product features.
  • Limited Liquidity: Once you enter the annuitization phase, accessing your funds may become more complex.

Is a Fixed Rate Deferred Annuity Right for You?

The suitability of a fixed-rate deferred annuity depends on your unique financial goals, risk tolerance, and time horizon. It's always advisable to consult a financial advisor to determine if this product aligns with your overall retirement plan.

Fixed-rate deferred annuities provide a compelling combination of safety, growth potential, and guaranteed income options. If you're approaching retirement or seeking ways to protect your savings, they are definitely worth considering.

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Roy Snarr picture

Roy Snarr

Snarr Financial & Insurance Services, Inc.

1640 Highland Falls Dr.

Suite 101

Leander, Texas 78641

(512) 591-8814

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