Fixed annuities and indexed annuities are looking up.
April 6, 2012 by Steve Thompson
By Steve Thompson on April 4, 2012 at 7:15 am
Investors choosing to hold their expendable income in fixed annuities and indexed annuities have been on the rise over the past year. This corresponds with the historical nature of an annuity behavior in the wake of a recession. However, the interest in both fixed annuities and indexed annuities have gone up much farther than in previous historical instances. This is due to many other mitigating factors that are unique to the most recent recession.
Investors can learn a great deal from the spiking interest in the more conservative annuity packages. For one, the reason that the interest was so sudden was because many investors had pulled money out of 401(k) packages and needed to get as much of those funds back into a retirement account as they could. As soon as they could muster the courage, they invested in conservative annuity packages. This in turn drove up the interest payments on fixed annuities and indexed annuities, benefiting everyone who chose to invest in them.
The fluctuation of variable investments also had a great deal to do with the increased interest in indexed annuities and fixed annuities. Even after the recession had officially ended politically, many investors still felt economically unsure about their prospects. Therefore monies that would have gone into the securities market and even the options market went into the annuities market. This allowed many fixed and indexed annuity underwriters to lower their fees for annuities, further increasing the profit margin for investors.
This trend has continued as developing economies continue to inject uncertainty into the world economy. Along with the downgrade of the credit rating of formally untouchable first world countries, these new economic criteria continue to make fixed annuities and indexed annuities an attractive investment for most people who are looking for a way to save and invest.