A fixed annuity, also referred to as a tax-deferred fixed annuity, is a contract between you and an insurance company with a guaranteed interest rate. The insurance company credits interest on your fixed annuity, but taxes are deferred during this growth process. A fixed annuity earns competitive returns that are very safe. Because a fixed annuity is tax-deferred, you earn additional interest compounding on the money you would normally be paying in taxes.

When purchasing an annuity contract, you may wish to consider when you will want to receive income from your contract. An immediate annuity allows you to receive income right away, while a deferred annuity allows you to build your account value over time and convert it to income in the future. Fixed annuities are a powerful tool for saving for retirement and guaranteeing regular streams of income upon retirement and to supplement Social Security.

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