Annuities for Safe Growth

Fixed Annuities = Fixed annuities, sometimes called Multi Year Guaranteed Annuities (MYGA) are very straight forward, relatively short-term investments.  These usually range from 3 years to 7 years and offer a fixed rate of return, normally credited annually, inside an annuity wrapper, which means it grows tax deferred.  The shorter the term, say 3 years, the smaller the rate. The longer the term, say 7 years, the higher the fixed rate. When compared to CDs, Fixed annuities stack up favorably and offer higher yields with tax deferred growth.  These annuities are often the right fit for someone looking for extremely safe, predictable and relatively short term investments that will yield higher than a banks CD.

Fixed Indexed Annuities (FIA) = The insurance companies investments inside an FIA are similar to a fixed annuity, however, rather than guaranteeing a fixed yield, they guarantee zero yield, and invest that difference in call options.  These call options follow an index, like the S&P 500. If the index goes up, the options pay off and the owner is credited with a yield, sometimes a sizable yield. If the index goes down, the owner loses nothing.  These products were invented in the late 1990s are relatively new, but they are the fastest growing annuity in the industry because of their high upside, low to no fees and no risk of negative market crediting.