A fixed differed annuity is a financial tool that offers a fixed rate of savings. They typically offer higher rates of return then CD’s. It can either help you build savings or it can protect your savings. Keep in mind that an annuity is an insurance contract. What are you insuring? Income. An example is when someone is about 10 years from retirement they may not want to be exposed to market risks or they may want to reduce the market exposure they are at. The fixed deferred annuity will guarantee a fixed rate of return and make the promise of a option to convert the principal and interest to an income stream. This can be very helpful when faced with the possibility of out living your savings.
It is a rip-off. A bad investment. A financial product that helps insurance companies and agents make a lot of money over time, without benefiting the client much at all. In some cases annuities make a lot of sense, but in most cases they are sold by salespeople to clients who have NO NEED in them at all.