When it comes to annuities, there are many different options to choose from. As a result, it can be challenging to decide which one is right for you. This guide will compare two popular annuity options: fixed and variable. We will look at the pros and cons of each option so that you can make an informed decision about which one is right for you.
Fixed Annuity Payouts
The fixed annuity is a popular choice for people who want stability in their retirement income. You will know exactly how much income you will receive each month with a fixed annuity, and it will not fluctuate based on the stock market. This can be a good option for risk-averse people who do not want to worry about their income fluctuation.
The downside of a fixed annuity is that your income will not increase over time. If you live for a long time, or if inflation goes up, your income will not keep pace with the cost of living. Additionally, if interest rates go up, you will not be able to take advantage of the higher rates.
Variable Annuity Payouts
The variable annuity is a good choice for people willing to take on more risk in exchange for the potential for higher income. With a variable annuity, your income will fluctuate based on the stock market. This can be a good option for people who are comfortable with the ups and downs of the stock market and willing to take on more risk in exchange for the potential for higher income.
The downside of a variable annuity is that your income can go down and up. If the stock market goes down, so will your income. This can be a good option for people who are comfortable with the ups and downs of the stock market and willing to take on more risk in exchange for the potential for higher income. Additionally, variable annuities typically have higher fees than fixed annuities.
Bottom Line
So, which annuity pays the most? It depends on your situation. A fixed annuity may be suitable if you want stability and predictability in your retirement income. On the other hand, if you are willing to take on more risk in exchange for the potential for higher income, a variable annuity may be a good option for you. Ultimately, the decision is up to you and your individual needs.
If you’re unsure which annuity is right for you, contact us. We can help you understand the pros and cons of each option and make a recommendation based on your individual needs.
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