Fixed Annuity (FA)
A Fixed Annuity (FA) is an insurance contract designed to provide safe, predictable growth on your money and guaranteed income in retirement. FAs are preferred by clients who want to protect their principal and earn a steady interest rate, without the volatility of the stock market. These include FIAs, MYGAs, SPIAs, and DIAs.
Annuity + Lifetime Income Rider = Hybrid Pension Plan
Did you know that you can create your own pension plan? A hybrid pension is an annuity paired with a lifetime income rider. These financial products provide a stable income stream in retirement while allowing some level of control over the underlying assets. At KCIIS, we specialize in designing these types of plans to provide our clients with guaranteed retirement income. Ready to build your own pension plan?
How Do Fixed Annuities Work?
You deposit an initial lump sum with an insurance company. In return, the insurance carrier agrees to pay you a fixed interest rate for a specific number of years. At the end of that period, you can choose to renew, withdraw, or convert your annuity into regular income payments.
Key Points:
- Your money grows at a guaranteed rate, typically higher than most bank CDs.
- Earnings grow tax-deferred until you take cash out.
- You can turn your balance into income payments for a set time or for life.
- If you withdraw early (before age 59½), there may be tax penalties and surrender charges.
The Different Kinds of Fixed Annuities
Traditional Fixed Annuity
- Pays a declared interest rate that can reset periodically.
- Suitable for long-term accumulation and income planning.
Multi-Year Guarantee Annuity (MYGA)
- Locks in a guaranteed rate for a fixed period (like 3, 5, or 7 years).
- Works similarly to a CD alternative with tax-deferred growth.
Immediate Fixed Annuity
- Converts a lump sum into immediate income payments.
- Payments can last for a set period or for life.
Key Points:
- Different types match different stages of retirement.
- MYGAs are best for short- to mid-term growth.
- Immediate annuities are best for guaranteed lifetime income.
Contact Us Get in Touch
Have a question or feedback?
Fill out the form below, and we’ll respond promptly!
By providing your name and contact information, you are consenting to receive calls, text messages, and/or emails from a licensed insurance agent about Medicare Plans at the number provided. You agree that such calls and/or text messages may use an auto-dialer or robocall, even if you are on a government do-not-call registry. This agreement is not a condition of enrollment.
Not connected with or endorsed by the United States government or the federal Medicare program. This is a solicitation of insurance, and your response may generate communication from a licensed producer/agent.