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Fixed vs. Variable Annuities: Which one is better for you?

When it comes to annuities, there are two main types to choose from: fixed and variable. Both types offer different features and benefits, so it’s important to understand the differences and choose the one that best fits your needs.

Fixed Annuities: These annuities pay a fixed rate of interest on your money. The interest rate is guaranteed, which means you know exactly how much money you will receive each month. It is a low-risk investment option.

Variable Annuities: These annuities allow you to invest your money in a variety of stock and bond funds. The amount of money you receive each month depends on the performance of the investments you choose. Variable annuities are considered a higher-risk investment option.

Fixed annuities are best for those who want a guaranteed income and are not willing to take on much risk. On the other hand, variable annuities are best for those who are willing to take on more risk in exchange for the potential for higher returns.

When choosing an annuity, it’s important to consider your long-term financial goals, risk tolerance, and retirement income needs. Speak with a financial advisor or insurance agent to understand the different options and which one may be the best fit for you.

In summary, when it comes to annuities, there are two main types to choose from: fixed and variable. Fixed annuities are low-risk, paying a guaranteed rate of interest, while variable annuities allow for investment in stock and bond funds, with the potential for higher returns but also higher risk. Consider your long-term financial goals, risk tolerance and retirement income needs when making a decision, and consult with a financial advisor or insurance agent.

 

Fixed vs. Variable Annuities: Which one is better for you?

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