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Because fixed annuities are a simple product, use in a retirement income plan is just as simple. We’re talking about no more than safe money and tax deferred interest here. Everyone would ideally have a pool of cash for discretionary expenses in retirement. Most people will likely hold accessible cash in a variety of bank accounts such as checking, savings or CDs. Fixed annuities, however, carry much greater benefits than bank deposits.
Benefits of Fixed Annuities For Retirement Income:
Checking and savings accounts offer little to no interest accumulation and CDs traditionally pay lower interest rates than fixed annuities. All interest earned in bank accounts is subject to annual taxation while annuities allow for tax deferred growth.
The pros and cons of fixed annuities are considered in detail on the ‘pros and cons’ page of this site. It is always a good idea to hold a certain amount of cash in a bank so it is easily accessible. Careful planning can help you determine an appropriate allocation toward greater interest rates and tax deferral in a fixed annuity for retirement income.
Choosing Fixed Annuities For Retirement Income
Fixed Annuities For Retirement Income are a great option for the right people- find out how to chose the right one for your retirement income needs by signing up as a free member of Annuity Straight Talk, or simple Contact Us for assistance.
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