Do Most Fixed-Rate Annuities Have Any Associated Fees?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Overview of Fixed-Rate Annuities Fees

Fixed-rate annuities are popular financial products for retirement planning. Generally, they do not involve traditional fees. However, it’s important to understand how they work and what costs might be indirectly involved.

Understanding Fixed-Rate Annuities

Fixed-rate annuities offer a guaranteed interest rate over a specified period. They are considered low-risk investments, making them appealing for stable income in retirement.

Key Characteristics

  • Guaranteed Interest Rate: Provides stability in returns.
  • Investment Period: A specific duration for the annuity.

Fee Structure in Fixed-Rate Annuities

Traditional Fees

  • Majority Case: Most fixed-rate annuities do not have traditional fees like management or annual fees.
  • Exception Scenarios: Some contracts might have specific fees under certain conditions.

Indirect Costs

  • Lower Interest Rate Exchange: To offer certain benefits or ‘bells and whistles’, providers might offer a slightly lower interest rate.
  • Surrender Charges: Early withdrawal might incur a surrender charge.

Examples of ‘Bells and Whistles’

Comparison with Other Annuities

  • Variable Annuities: Often have higher fees due to active management.
  • Indexed Annuities: Might have fees depending on the indexing strategy.


While most fixed-rate annuities do not have traditional fees, it’s crucial to consider potential indirect costs like lower interest rates for added features. Understanding these aspects ensures a well-informed decision for retirement planning.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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