What is a Fixed Period Annuity and How Does It Work?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding Fixed Period Annuities

What Is a Fixed Period Annuity?

A fixed period annuity, sometimes referred to as a period certain annuity, is a financial product designed to provide you with a steady income stream for a specified period, usually ranging from five to 20 years or longer. Unlike lifetime annuities, which pay out as long as you live, fixed-period annuities stop payments once the period ends, regardless of your survival. This makes them a reliable choice if you need predictable income for a certain timeframe, such as bridging the gap until Social Security benefits start.

How Does It Work?

You make regular payments into the annuity account—these can be weekly, monthly, or yearly. The money in your account earns interest over time. When the fixed period ends, you begin to withdraw money from the account. The monthly payout amount depends on your total savings and the interest rate. If necessary, you can opt for a lump sum withdrawal at the end of the period.

Benefits of Fixed Period Annuities

Fixed period annuities offer several benefits:

  • Steady Income: Provides a consistent income stream during retirement, helping you maintain your lifestyle and plan for expenses.
  • Tax-Deferred Growth: Earnings grow tax-deferred, meaning you don’t pay taxes until you withdraw the money.
  • Death Benefit: If you pass away before the period ends, your beneficiaries receive the remaining balance, ensuring financial security for your loved ones.

Potential Risks

While fixed period annuities are generally safer than stock market investments, they come with certain risks:

  • Low Interest Rates: Typically, they offer lower interest rates compared to other investments, around 1% annually.
  • Loss of Control: Annuitization, the process of distributing payments, is irrevocable.
  • Outliving the Fixed Period: You might outlive your annuity payments, necessitating other income sources.
  • Inflation: Rising inflation can erode the purchasing power of your fixed payments over time.
Fixed Period Annuity

How We Can Help

At The Annuity Expert, we understand the complexities and emotional challenges of retirement planning. With 15 years of experience as an insurance agency, annuity broker, and retirement planner, we are dedicated to finding the best solutions at the lowest costs for you.

Your Goal: Secure, Predictable Retirement Income

We know you want peace of mind in retirement, ensuring that you won’t outlive your savings and can maintain your lifestyle. The core problem we solve is providing a stable income stream that addresses the uncertainty of financial markets and inflation.

Symptoms and Emotional Impact

You may feel anxious about:

  • Financial Stability: Worrying about outliving your savings.
  • Investment Risks: Fear of losing money in volatile markets.
  • Inflation: Concern about rising living costs eroding your savings’ value.

We empathize with these concerns and leverage our expertise to offer solutions that mitigate these risks.

Fixed Period Option

What We Recommend

Step 1: Initial Consultation

  • What Happens: We start with a free consultation to understand your financial goals and retirement timeline.
  • Main Benefit: Personalized advice tailored to your unique situation, ensuring your retirement plan aligns with your needs.

Step 2: Customized Annuity Plan

  • What Happens: We design a fixed period annuity plan that fits your income needs and risk tolerance.
  • Main Benefit: A clear, customized strategy that provides peace of mind and financial stability.

Step 3: Ongoing Support and Management

  • What Happens: We provide continuous support and review your plan regularly to ensure it remains aligned with your goals.
  • Main Benefit: Long-term security and confidence, knowing your retirement plan is actively managed.

Features and Benefits

  • Expert Guidance: Leveraging 15 years of industry experience for informed decisions.
    • Meaning: Confidence in your financial future.
  • Personalized Plans: Tailored solutions for individual needs.
    • Meaning: Assurance that your plan meets your unique requirements.
  • Continuous Support: Regular reviews and updates to your plan.
    • Meaning: Ongoing peace of mind.

Common Objections and Arguments

  • Concern About Low Returns: Fixed period annuities offer stability over higher but riskier returns.
  • Fear of Outliving Payments: We offer complementary strategies to ensure long-term financial security.
  • Inflation Worries: We incorporate inflation protection options in your plan.

Ignoring these solutions can lead to financial insecurity and stress in retirement. Conversely, partnering with us ensures a secure, stable income and peace of mind, fully allowing you to enjoy your golden years.

Experience the joy and confidence of knowing your financial future is secure. Contact us today for free advice or a quote!

What Is A Fixed Period Annuity

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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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