Fixed annuities are a type of contract where an insurance company makes a series of guaranteed payments in exchange for a sum of money at the outset of the contract. Some fixed annuities will provide for a payment plan over time to build up the annuity lump sum. This type of investment instrument can help stabilize investment income, defer taxes on investment earnings and is often part of a financial strategy for retirees or those contemplating retirement. Fixed annuities provide guaranteed income stream which means the insurance company takes the investment risk rather than the insured.
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