• Fixed annuities are a type of investment sold by insurance companies and sometimes other financial institutions. Fixed annuities are often favored by people who have retired, or are near retirement, because they offer a predictable income at periodic intervals over a certain period of time. There are various types of annuities, though most have similar features, and you can modify yours to suit your needs by adding different options for an extra fee.
  
  

Tax Deferred

• A fixed annuity can save money on taxes. Much like with a 401(k) retirement account, a fixed annuity is allowed to grow in a tax deferred status, which means no taxes are paid until you begin to receive money from it, and then taxes only apply to the amount that is paid out. With most of us beset on all sides from obvious and hidden taxes, the prospect of an investment growing in a tax deferred status is a big deal.
  
  

Protected

• Some of us have had financial setbacks in the past that resulted in garnishment, levy, or even a lawsuit, but any money inside a fixed annuity is generally protected from any of these methods of collection. The end result is that you have a chunk of untouchable (by others) money available to you in the event of a crisis like a car wreck, extensive medical bills, or any number of other unplanned setbacks.
  
  

Secure Principal

• For people interested in security, a valuable feature of the fixed annuity is that you cannot lose the principal unless the insurance company you bought it from collapses. This is a vast difference from almost any other kind of investment. You'll get no such guarantee from the stock, commodity, currency or real estate market. While not entirely risk free, for retirees and others who operate outside the traditional work force, and who rely on periodic annuity payments for living expenses, it's critical to keep their principal at minimal risk.
  
  

Lifetime Income

• An outstanding feature of the fixed annuity is you can set it up to transfer to a fixed income option when you retire. This special brand is called a deferred fixed annuity, which allows you to put money into it and let it grow during your working years. When you're ready to retire, the annuity kicks in with a lifetime income guarantee. As long as you live, you will receive income from it. The amount is determined using actuarial tables that project your lifespan based on certain factors. Don't let that idea make you grim. Think, instead, of how much fun you're going to have beating the forecast and living longer than anyone expected. No matter how long that is, the payments continue.