With the market currently in a state of volatility, a fixed annuity is a good place to turn if you are looking for an option to put cash away to earn tax-deferred interest. Fixed annuities pay a guaranteed amount, and there are currently options for a much higher return than a certificate of deposit from a bank.
A few things I really like about including annuities in your investment portfolio:
- Money grows on a tax deferred basis.
- Guaranteed rate of return, offering a predictable payout.
- Provides a death benefit to beneficiaries.
- Options for penalty-free withdrawals; liquidity built in for emergencies. (Withdrawal amount limited based on specific contract).
- Life income options available at annuitization.
- Options for A+ rated companies.
Below is an example of how $100,000 will grow at 3.5% interest in 7 years:
| Year | Principal | Interest Rate | Interest Earned |
| 1 | $100,000.00 | 3.50% | $3,500.00 |
| 2 | $103,500.00 | 3.50% | $3,622.50 |
| 3 | $107,122.50 | 3.50% | $3,749.29 |
| 4 | $110,871.79 | 3.50% | $3,880.51 |
| 5 | $114,752.30 | 3.50% | $4,016.33 |
| 6 | $118,768.63 | 3.50% | $4,156.90 |
| 7 | $122,925.53 | 3.50% | $4,302.39 |
| $127,227.93 |
We currently have options for 3.50% interest for 7 years at $100K or more, and 3.10% for 7 years if less than $100K. We also have 2.25% for 3 years at $100K or more, and 1.80% for 3 years if less than $100K.
It’s a great time to look into your options to decide if an annuity is the right fit for you.