Common Fees Associated with an Immediate Fixed Annuity

Many people decide to supplement their retirement portfolio by purchasing an immediate fixed annuity. Most investors will tell you that is a much safer way to invest your money than investing in stocks and a much better way to make money than investing in bonds. However, before before you purchase an immediate fixed annuity you should consider some of the common fees that are associated with them first. These fees could include such things as:

  • Contract fees:  This is usually a one time fee that is billed when the annuity is first drawn up by the insurance company. This pays for their time and services.
  • Transaction fees:  These fees would apply each and every time you make a change to your annuity terms. This fee may also be applied once you begin drawing from your annuity, the first time.
  • Load Fees:  If you were ever to add more money to your annuity this fee may be applied.
  • Management and Investment fees:  These are paid to the insurance company to help manage your investment.
  • Yearly Maintenance Fees:  These fees are applied to maintain your account.

Yes, these fees can add up over a few years. This is why it pays to shop around if you are considering purchasing an immediate fixed annuity. Check with several companies and ask about their fees before you actually invest in one.


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