fixed annuities
I am a conservative 78-year-old grandmother supporting my junior in college granddaughter and recently sold some land; My bank’s investment counselor suggested I put a significant portion of my cash (200,000-300,000) in a fixed annuity for 3-5 years at a guaranteed rate of 2.5%. Are fixed annuities safe?
Terry Says
Fixed annuities are the insurance industry’s equivalent of a CD — but without the FDIC guarantee. They are safe, if you deal with a top-rated company. But I suggest at this stage of life, you leave some money in the bank, in a far-lower-yielding 1-year CD – just in case you need the cash. It won’t hurt to put $100,000 in a MYGA (multi-year guaranteed annuity) but no longer than 3 years. The current best rate from a good company is about 2.5%.
