If you are nearing retirement age, you may have begun to think about how you will receive your income once you stop working. One option that is growing in popularity is the fixed amount annuity. But what is a fixed amount annuity, and how does it work? In this guide, we will answer all of your questions about this type of annuity!
What Is A Fixed Amount Annuity?
A temporary annuity settlement option where you get a lump sum of money plus interest. You will get a fixed amount of money each time until the principal and interest have been paid off. If you are still alive when that happens, payments will stop.
How Does A Fixed Amount Annuity Work?
You will need to purchase an annuity from an insurance company. Once you have done that, the insurance company will make payments to you for a set period of time. These payments are usually made monthly but can be made more or less often depending on the terms of your contract.
What Are The Benefits Of A Fixed Amount Annuity?
There are several benefits that come with a fixed amount annuity. First, you will know exactly how much money you will receive for each payment. This can be helpful in budgeting and planning for your retirement expenses. Additionally, a fixed amount annuity can provide peace of mind knowing that you have a guaranteed income stream for a fixed period.
What Are The Disadvantages Of A Fixed Amount Annuity?
One of the main disadvantages of a fixed amount annuity is that you will not have access to your principal investment. Additionally, if you live a long time, you may outlive your annuity payments. Finally, there may be fees associated with your annuity that will reduce the amount of money you ultimately receive.
Bottom Line
Now that you know all about a fixed amount annuity, you can decide if this type of retirement income stream is right for you. If you have any additional questions, be sure to contact us. We can help you understand all of your options and make the best decision for your unique situation.
Happy retirement planning!
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