What are Fixed and Variable Annuities?
Fixed annuities offer either a fixed interest rate or interest credited by performance of a market index. These annuities are contractually guaranteed to never lose money. Index annuities are classified as a fixed annuity. Your money is never at risk in the stock market. Variable annuities offer the opportunity for tax-deferred growth if one has fully funded their IRA and/or 401(k) contributions for the year. Variable annuities can be thought of as mutual funds growing with tax-deferred status with little liquidity.
