Fixed Annuities: Your Q&A with Don Dorr
Today, we’re sitting down with Donald L. Dorr Jr., Certified Financial Planner™ (CFP®), to go over what you need to know about fixed annuities!
Donald (Don) is a part of the First New York Retirement and Investment Services team. He has over 31 years in the finance industry and specializes in financial planning. In addition to his experience, he has a Certified Financial Planner™ (CFP®) designation and holds his Series 6, 63, 66, and 7 Financial Securities Registrations with LPL Financial. He’s excited to give you more information about how they can help you with retirement.
Let’s hand this over to Don and get his answers to your questions! Download our quick reference infographic or visit our Fixed Annuities Q&A infographic page.
Q1: What are Fixed Annuities?
Don: Annuities is a common term that’s used in retirement planning. Essentially, an annuity is an investment that is issued by an insurance company. There are three main types of annuities, including fixed, variable, and index. In this Q&A, we’ll be focusing on fixed annuities!
Like other types of annuities, fixed annuities are fundamentally insurance contracts designed to help supplement your retirement income. Whereas Life insurance protects your family when you pass away too early, annuities can help keep you from outliving your retirement assets. Depending on the annuity you choose, you’ll receive different payout options, lump sum, or payments over a specific period of time or lifetime.
So, what makes an annuity “fixed”? It’s simple: A fixed annuity has a guaranteed fixed interest rate and the safety of the principal. In other words, you’re guaranteed to receive your principal investment back after a specific period of time.
Q2: Do I Want a Fixed Guaranteed Interest Rate?
This depends on the amount of risk you want to take on. However, a fixed guaranteed interest rate has its own advantages. There’s no stock or bond market risk.
So, no matter how much the market fluctuates, you’ll never earn less than the guaranteed interest rate. This makes it an ideal option for those with retirement goals for a few reasons:
- Guaranteed interest rate
- Safety of principal
- Enjoy tax-deferred growth
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The only thing to note is that you may be subject to a 10% withdrawal tax if you withdraw funds before the age of 59 ½.
Q3: Do I Need to Pay an Annual Fee?
Nope! First New York Retirement & Investment Services has access to fixed annuities with no annual fees. However, if you’re thinking about getting one elsewhere, there are some that do have fees, whether that be to purchase or an annual fee. So, be sure to research your options ahead of time.
Q4: Why are Fixed Annuities so Popular Right Now?
As of 2022, the guaranteed fixed annuity rates are the highest I’ve seen in more than 10 years! So, if you’re considering getting one, now is the time to reach out to First New York Retirement and Investment Service to schedule an appointment.
Have Questions: Contact First New York Retirement & Investment Services
Ready to learn if a fixed annuity aligns with your retirement goals? Schedule an appointment with one of First New York Retirement & Investment Services’ professionals. Call (518) 393-1326, extension #1302, visit the First New York FCU Retirement & Investment Services website, or sign in here if you currently have an investment account.
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Disclosure
Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRA penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.
This material contains only general descriptions and is not a solicitation to sell an insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect valuable coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult and insurance professional. You may also visit your state’s insurance department for more information.
First New York FCU provides referrals to financial professionals of LPL Financial (“LPL”) pursuant to an agreement that allows LPL to pay First New York FCU for these referrals. This creates an incentive for First New York FCU to make these referrals, resulting in a conflict of interest. First new York FCU is not a current client of LPL for advisory services.
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The LPL Financial registered representative(s) associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First New York Federal Credit Union and First New York Retirement and Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using First New York Retirement and Investment Services, and may also be employees of First New York Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, First New York Federal Credit Union or First New York Retirement and Investment Services. Securities and insurance offered through LPL or its affiliates are:
| Not Insured by NCUA or Any Other Government Agency | Not Credit Union Guaranteed | Not Credit Union Deposits or Obligations | May Lose Value |
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