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Chapter 16. Tax-Sheltered Annuities > The Different Characteristics of an Annui... - Pg. 158

Tax-Sheltered Annuities 158 Our Advice When shopping for a fixed-rate annuity, get past that initial come-on rate and ask about the rates the insurance company is paying on similar contracts that are five or ten years old. Those contracts should be paying at least the base rate stated. You'll get a good idea of how the company treats its customers by checking this out. To sum up the choices you have to make: 1. 2. 3. Deferred or immediate income? Single premium or periodic payments? Fixed or variable rate of return? The Most Popular Items on the Menu The most popular immediate annuity is the fixed annuity. Why? Because of its safety. With a fixed annuity you know what you're getting, because there is a guaranteed rate of return and you can count on that payout. If you were to choose the variable annuity and you invested your principal in stock and bond mutual funds, and then the stock market took one of its periodic nose dives, your