Fixed Annuities

Fixed annuities are insurance contracts that convert a lump sum or series of payments into a guaranteed return over a specified time. In practical terms you give money to an insurance company and in return they promise a fixed interest rate for a set period or guaranteed periodic payments for life or a defined term. There are two common types: fixed deferred annuities and fixed immediate annuities.

A fixed deferred annuity lets your money grow at a guaranteed interest rate over a contract period. You defer taking income until later, often to benefit from tax deferral and a locked-in rate. A fixed immediate annuity begins payments almost immediately after you make a single premium payment. This turns retirement savings into steady income.

Fixed annuities are often used by people who want predictable income, protection from market swings, or to complement Social Security and pensions. They are not for short term savings because contracts can carry surrender charges and limited liquidity. Choosing the right product depends on your retirement timeline, income needs, and comfort with leaving money with an insurance company.