Fixed annuities provide all of the following except
A) Guaranteed interest
B) Retirement funds
C) Hedge against inflation
D) Tax advantage
The Correct Answer Is:
- C) Hedge against inflation
Fixed annuities do not provide a hedge against inflation, as they are indexed to the rate of inflation. This means that if inflation rises, your guaranteed income will also rise, but if inflation falls, your guaranteed income will also fall. Fixed annuities do not provide a hedge against inflation as they are linked to the Consumer Price Index (CPI). Over time, CPI will rise more than the fixed annuity payout, resulting in a loss of purchasing power. In addition, variable annuities offer more flexibility and can provide a hedge against inflation by providing a higher payout if inflation rises faster than the fixed rate.
Fixed annuities provides Guaranteed interest.The key feature of these products is that the rate of interest is set when you purchase the annuity, and it will not change for the duration of your contract. This means that you can rest assured that you will be receiving a guaranteed rate of return on your investment. Another advantage of fixed annuities is that they are tax-deferred. This means that you will not have to pay taxes on your income until it is actually received, which can provide significant financial benefits over time.
Finally, fixed annuities are generally considered to be very safe investments, as the chances of experiencing a large loss are relatively low. This makes them a great option for those who want to ensure stability in their financial future.
Fixed annuities provides Retirement funds. Fixed annuities provide retirement funds that are guaranteed to provide a certain level of income for the rest of your life. These annuities are a great way to ensure that you have a steady stream of income while you’re still working, and they can be a great way to save for retirement.
Fixed annuities are a type of retirement fund that provide a fixed payout each year, regardless of the stock market’s performance. These funds can be a good option for people who want to ensure a consistent income stream throughout their retirement years. They can also be a good option for people who don’t want to worry about fluctuating stock prices.
Fixed annuities provides Tax advantage. They are also a good option for people who want to avoid risk. Fixed annuities will never lose value and they can provide a guaranteed income for the life of the contract.Fixed annuities present a tax advantage for those who want to defer paying taxes on their retirement savings. This is because the interest paid on a fixed annuity is considered taxable income. By contrast, if you receive periodic payments from a variable annuity, these payments are not considered taxable income until you withdraw them.