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What makes fixed annuities so popular? They can offer a unique and attractive blend of safety, growth potential, tax advantages, lifetime income, liquidity, and estate advantages.

A top priority for most people when they are saving their money, without question, is safety. No one puts their money in a place where they expect to lose it. They put their money in a place where they expect to get it back one day, hopefully with some nice growth. 

By contract, a fixed annuity guarantees that your principal is protected from downside market risk and that you can get it back again, as long as you avoid any penalties for early withdrawal.*

Fixed annuities can offer excellent retirement planning options.

Tax Advantages
People want their money to grow as fast as possible, and besides having a constant rate of growth, having some sort of tax advantage helps to accomplish that goal. Annuities have a tax advantage, and that is better than no tax advantage. Some people buy annuities for their tax deferral.

Lifetime Income**
Annuities typically offer a variety of options to pay the value of the contract out over time as a guaranteed periodic amount of income. In fact, the dictionary definition of an annuity is often something like “a contract providing for an amount payable yearly or at other regular intervals.” Payment options often include income that is guaranteed to continue for the rest of your life, no matter how long you live. 

Most people recognize that liquidity, safety, and growth do not co-exist very well. For example, with a checking account, you get excellent safety and total liquidity, but most checking accounts pay little or no interest. With stock market mutual funds, you get good liquidity and hopefully a good rate of growth, but you are sacrificing some safety.

So, if an annuity is going to give you guarantees of safety and the potential for a good rate of growth, there needs to be some sacrifice in liquidity. The good news is that most annuity products build in enough liquidity options to make many customers comfortable. Even retirees who need to withdraw money every year to supplement their incomes can find annuities that allow them to take such withdrawals

Estate Advantages
At some point in their lives, many people become motivated to consider what will happen to their money after their death. An estate advantage offered by annuities is speed. With an annuity, you get to name a beneficiary and typically avoid the probate process, so an annuity can be the quickest way to get money to a beneficiary after your death.

Guarantees provided by annuities are subject to the financial strength of the issuing insurance company;not guaranteed by any bank or the FDIC. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values.

* Your principal is guaranteed not to be reduced because of a downturn in the applicable market index. However, Withdrawals in excess of the Free Withdrawal amount are subject to Withdrawal Charges during the Withdrawal Charge period, and may result in a loss of principal.

** Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.