Deferred variable annuity
With this type of annuity, you can invest in portfolios covering all of the major asset classes—giving you a chance at long-term growth. Deferred variable annuities typically provide you with the flexibility to manage your account as you see fit. You direct your investment and you can typically make tax-free exchanges between the investment portfolios offered. You can also add to or withdraw from your annuity at any time, although you may be subject to taxes and penalties on the withdrawal of any tax-deferred earnings if you're under age 59½.
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Fixed deferred annuity
These annuities provide you with the stability of a fixed rate of return and protection of your principal.*
The fixed rate in these products is locked in for a set amount of time, typically 3 to 7 years. While most fixed deferred annuities require that you keep your money invested for the duration of the guaranteed period in order to avoid surrender charges, they typically do allow limited access to your investment. Therefore, you should only consider them if you don't think you'll need to access more than 10% of your investment annually for the duration of the rate guarantee period. As with other deferred annuities, you'll be subject to taxes and penalties on your earnings if you withdraw them prior to the age of 59½.