Fixed indexed annuities and fixed interest annuities are both very popular options for placing retirement money. Is one better than the other? All things being equal the answer is no. But all things are not equal.
The answer to the question lies in the details of your retirement plan. When are you going to retire or are you already retired? It matters because the two annuities have different purposes.
A fixed indexed annuity is designed for long term growth and then income. The keyword is growth! Your money is not invested in the market so risk is not a factor with either annuity.
A fixed interest annuity is designed for income with zero growth. It pays a fixed rate and is good for designing short term income and if your investment time horizon is short. If you are older, for instance, your time horizon may only be 5 years until you will need regular income for your annuity.
Which is better also depends on what investment they money is coming from in the first place. A step up from CD that has been rolling over interest for 10 years or more could be a fixed interest annuity. Interest would be tax deferred instead of taxable each year. If the money has no clear purpose other than savings for a "what if" scenario the fixed interest annuity is great place stow away that money over time.
Which is better? Read the new article - Are Fixed Interest Or Fixed Indexed Annuities Better?
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