What to Know Before Buying a Fixed Annuity in 2025
With market volatility at an all-time high and interest rates in flux, more retirees and pre-retirees are turning to fixed annuities as a stable solution for guaranteed growth. But not all fixed annuities are the same—and choosing the wrong one could limit your flexibility or cost you in lost earnings.
If you’re considering locking in a fixed annuity this year, here are the key things to evaluate:
1. What Is the Current Guaranteed Rate?
Fixed annuities offer guaranteed interest over a set period (typically 3, 5, or 7 years). As of now, some contracts are offering 5.40% or higher—significantly better than many CDs or savings accounts. Be sure to verify whether the rate is guaranteed for the entire term or just an introductory rate.
2. What Are the Withdrawal Rules?
Most fixed annuities allow 10% penalty-free withdrawals each year, but rules vary. Make sure you understand surrender charges, penalties for early withdrawals, and what happens if you need access to more than the allowed amount.
3. What Happens After the Term Ends?
At the end of the contract period, your annuity may automatically renew at a lower rate—or roll into a different product. Ask if you’ll have the ability to cash out, transfer, or reinvest without penalty.
At Diversified Insurance Brokers, we help clients shop the market to compare rates, guarantees, and liquidity features—so you can make a fully informed decision.
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