Using a Fixed Annuity for your IRA can be a great option. A Fixed Annuity IRA gives you safe and consistent returns that are guaranteed. Many people with an IRA CD choose to do a Rollover into a Fixed Rate Annuity.
Fixed Annuity IRA
An IRA is able to be funded with multiple types of investments. And you can have multiple IRA Accounts, not just one. Using a CD at a bank to fund an IRA is a common choice for retirement savers. If you have a CD IRA, you know that rates are at historic lows right now. This has caused many people to search for a CD Alternative to fund their IRA.
A Fixed Annuity IRA is fairly similar to a CD IRA, however, Fixed Annuities currently provide a much higher yearly return vs. a CD. As of 08/07/16, you can receive up to 1.5% more per year with a Fixed Annuity vs. a CD.
Fixed Annuities provide a guaranteed rate of return for a set amount of years. Terms for Fixed Annuity Rates last from 3-10 years. So you can lock-in an above average interest rate for the time period that suits your needs.
What kind of Returns will I receive?
Currently, there are Fixed Annuities that pay up to 2% more than what a CD at the bank pays you. The exact return will depend on the company you choose. This is why it is important to use an independent Annuity Specialist who can shop the market for you and find the best rates.
The longer the Term of the Annuity, the higher an interest rate you are able to receive. Annuity Terms last from 3 years, all the way up to 10 years. Terms of 3 years pay in the 1.5% range. Terms of 10 years pay in the 3% rage. Most people opt for a Term of somewhere around 5 years.
Who issues Fixed Annuities?
Insurance companies sell/issue Fixed Annuities. They are almost always sold via an Insurance Agent or Investment Advisor. Annuity rates can change on a weekly basis, the company with the highest rate one week might not be the highest the next. This is why it is best to use an experienced Annuity Specialist who will shop the entire annuity market on your behalf.
How safe is a Fixed Annuity IRA?
The returns are guaranteed by the company that issues the Annuity. Insurance companies are given “financial ratings” by independent rating agencies, just like Bonds receive. This is how you judge the financial stability of the Insurance Company that you are doing business with. These ratings are given based on a letter grading system of D – A++.
Any rating that is a B++ or higher is considered “investment grade” in the bond world… and is generally considered the “above average” level for Insurance Carriers. That means your money is safe and secure with companies that have a B++ or higher.
Which companies sell a Fixed Annuity IRA?
Almost every company in the market allows their products to fund an IRA. Unlike many other IRA options, there is no “extra cost” for an Annuity to be an IRA. The insurance carriers give you this for free as a standard benefit.
There are a lot of insurers who sell annuities. A few of the carriers that have consistently high rates include: Midland National, Athene Annuity, Oxford Life, Guggenheim Life, American Equity, Lincoln National, Mass Mutual, Guardian Life, The Standard, & American National.
If you have a question about Fixed Annuities, or if you would like a custom quote with the current rates, Contact Me and I will respond within 24 business hours.
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