What is a primary advantage of a fixed annuity?

A primary advantage of a fixed annuity is that it guarantees organized payouts and provides investment security. This means that the annuitant can expect consistent, predetermined payments over a specified period or for the rest of their life, depending on the terms of the annuity contract. Fixed annuities are designed to offer a stable and reliable income stream, which can be particularly beneficial for individuals who are planning for retirement and prefer not to take on the risks associated with market fluctuations.

The guarantee of principal protection in fixed annuities adds a level of security that is appealing to conservative investors who wish to avoid the uncertainty of the stock market. This assurance can be crucial for retirement planning, as individuals can anticipate their future financial needs with greater confidence, knowing they have a reliable source of income.

Additional options reflect characteristics that either do not pertain directly to fixed annuities or present features that are not typically associated with the stability and predictability that fixed annuities offer.