Understanding Fixed Income Annuities: 4 Types & Considerations

If you are looking into fixed income annuities, there are several factors that you need to consider. There are a few different types of fixed income annuities that you could potentially invest in. Here are a few of the different types that are available.

1. Immediate

With an immediate fixed annuity, you will be starting to take income payments immediately. This is a popular type of annuity for those that are retiring and decide to purchase an annuity with retirement funds from a pension plan.

2. Deferred

Instead of an immediate annuity, you could also invest in a deferred annuity. This is a type of annuity people choose to purchase well in advance of retirement. People that are planning ahead for retirement purchase this type of annuity and then will later start receiving payments.

3. Flexible Payment

With a flexible payment annuity, you will make periodic payments towards the purchase of your fixed annuity. This is very common among those that are still working and saving money for retirement. With a flexible payment schedule you can pay different amounts every month if you want.

4. Single Payment

Another option that you have is to purchase an annuity with a single payment. This will involve making a substantial one-time payment to the insurance company.