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The following WFG online article is intended to help consumers understand fixed annuities, which comprise one of the many financial products they may have access to in today’s marketplace. World Financial Group (WFG) associates strive to help clients develop their own personalized financial strategy to create a better future for themselves and their families. One of the most important steps in developing this strategy is helping clients to become educated on all the financial products and services that are available to them. A fixed annuity may not always be the best option for everyone, but for many people it is ideal. Learning more about this — and any other financial product — is an important first step toward making an informed decision.

What is an Annuity?

Before understanding what a fixed annuity is, it is important for readers of this WFG online article to understand the concept of annuities in general. A common reason to purchase annuities is to plan for retirement. The structure of an annuity makes it an ideal financial product for someone who wants to have a steady stream of cash payments after a certain point in the future. Once cash is deposited into an annuity, it remains there, growing over time, until the account is annuitized. After this point, the payment stream begins. The primary benefit of an annuity is the opportunity to grow wealth over a long period of time on a tax-deferred basis. Those funds will then be available to pay for expenses after retirement.*

The Specifics of Fixed Annuities

A fixed annuity differs from other types of annuities because of the way the payments are structured. The contract is set up so the annuitant receives fixed payment amounts once the account has been annuitized. In most cases, the annuitant will choose to receive these payments until death, although some may choose to structure their annuity payments to last for a fixed period of time, such as 20 years.

There are other types of annuities with variable payments that increase when the investment is doing better, but payments will decrease when the investment is not doing as well. For this WFG online article, it’s safe to say that an important benefit of a fixed annuity for most consumers is the predictability of the payments. For those who are on a stricter budget, it is good to know a set amount of money will be coming in each month.

*All guarantees are based on the claims-paying ability of the issuing company.
Tax and/or legal advice not offered by World Financial Group, Inc. or its affiliated companies. Please consult with your personal tax professional or legal advisor for further guidance on tax or legal matters.

World Financial Group, Inc. (WFG) is a financial services marketing company whose affiliates offer a broad array of financial products and services. Insurance products are offered through World Financial Group Insurance Agency, Inc. (WFGIA) or its subsidiaries. In California such services are provided under the name World Financial Insurance Agency, Inc. WFG and WFGIA are affiliated companies.

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