{"id":23138,"date":"2014-11-07T14:36:00","date_gmt":"2014-11-07T14:36:00","guid":{"rendered":"https:\/\/www.annuityfyi.com\/?page_id=23138"},"modified":"2022-12-16T17:55:21","modified_gmt":"2022-12-16T17:55:21","slug":"types-of-annuities","status":"publish","type":"page","link":"https:\/\/www.annuityfyi.com\/types-of-annuities\/","title":{"rendered":"What are the Different Types of Annuities?"},"content":{"rendered":"
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There are different types of annuities, but all boil down to essentially the same thing: an insurance contract that offers guaranteed income, often for life, and sometimes a shot at capital appreciation. It is meant to supplement income from a traditional stock and bond portfolio; it is seldom a good idea to invest more than half of your portfolio in an annuity\/annuities because an annuity is fundamentally illiquid.<\/p>\n\n\n\n

Annuities make the most sense for pre-retirees and retirees who want to minimize worry about bear markets in retirement. Retirees know they will have a specific stream of income no matter how markets perform. Annuities, in short, represent certainty in an uncertain world.<\/p>\n\n\n\n

Americans own about a quarter trillion dollars worth of annuities. There are hundreds of annuities on the market. They typically offer generous payments in comparison to other investments, such as bonds. Many have materially higher fees, however, and their payments \u2014 reflecting today\u2019s ultra-low interest rates \u2014 are not as attractive as they once were. Annuities are likely to become more alluring in the future as interest rates rise, which is widely expected.<\/p>\n\n\n\n

Five Basic Types of Annuities<\/h3>\n\n\n\n

There are five major categories of annuities \u2014 fixed annuities, variable annuities, fixed-indexed annuities, immediate annuities and deferred annuities. Which is best for you depends on several variables, including your risk orientation, income goals, and when you want to begin receiving annuity income.<\/p>\n\n\n\n

For your particular situation, each type of annuity has advantages and disadvantages. An immediate annuity, for example, pays the most but requires sacrifice of principal. A variable annuity may increase your principal over time, but fees are particularly high. What is important is that a potential annuity buyer become aware of the different types of annuities so that he or she can make the right decision about which type of annuity best fits their particular needs.<\/p>\n\n\n\n

Here Are 5 Annuity Types:<\/strong><\/h4>\n\n\n\n
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FIXED ANNUITIES<\/strong><\/h4>\n\n\n\n

These are fixed interest investments issued by insurance companies. They pay guaranteed rates of interest, typically higher than bank CDs, and you can defer income or draw income immediately. These are popular among retirees and pre-retirees who want a no-cost, modest and guaranteed fixed investment.<\/p>\n\n\n

\n\nLearn More About Fixed Annuities<\/a>\n\n<\/div><\/div>\n\n\n\n
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