A Fixed Annuity is a type of insurance contract that promises to pay the buyer a specific, guaranteed interest rate on their contributions to the account. By contrast, a variable annuity pays interest that can fluctuate based on the performance of an investment portfolio chosen by the account's owner. Fixed annuities are often used in retirement planning.

An indexed annuity is a type of annuity contract that pays an interest rate based on the performance of a specified market index, such as the S&P 500. They are subject to different rates, such as participation and cap rates. They differ from fixed annuities, which pay a fixed rate of interest, and variable annuities, which base their interest rate on a portfolio of securities chosen by the annuity owner. Indexed annuities are sometimes referred to as equity-indexed or fixed-indexed annuities.

Annuities are long-term investments designed for retirement purposes. Early withdrawals may be subject to a deferred sales charge and if taken prior to age 59½, a 10% federal penalty may apply. Money distributed from the annuity will be taxed as ordinary income in the year the money is received. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. Tax deferral is provided by your employer's plan and the tax deferral of the annuity does not provide any additional benefit. Annuities may be subject to additional fees and expenses to which other tax-qualified plan funding vehicles may not be subject. Generally, annuities contain mortality and expense charges, account fees, investment management fees, and administrative fees. However, annuities provide features and benefits such as lifetime income payments and death benefits which may be valuable. The guarantees of annuity contracts are contingent on the claims-paying ability of the issuing insurance company.