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Donna McElroy

Donna thrives to make a difference for her clients, by securing their financial needs. Not just focused on Annuities and Life Insurance but with all retirement and financial needs as well. Ensuring a safe retirement for her clients brings her great joy, more joy than any amount of money ever could. Website:

Office: (504) 832-8762 | Financial Investment Services

Fixed Annuities 101

Understanding and Utilizing Fixed Annuities

What is a Fixed Annuity?

An annuity is an agreement with an insurance company where you make either a single payment or multiple payments. In return, the company promises to provide you with a steady flow of income later. Fixed annuities offer a fixed interest rate, meaning your money will grow at a predetermined rate over time. This feature can benefit investors seeking an investment option with minimal risk.

Fixed annuities can be categorized into two primary types:

  • Deferred annuities: allow you to grow your tax-deferred money until you start taking withdrawals.
  • Immediate annuities: These annuities start paying you income immediately.

How Do Fixed Annuities Work?

  • Accumulation phase: During the accumulation phase, you invest your money in the annuity. Your money will grow at a fixed interest rate.
  • Distribution phase: Once you reach retirement age, you can start taking withdrawals from your annuity. You can receive your income in a lump sum, as a series of payments, or as a lifetime income stream.

Benefits of Fixed Annuities

There are several benefits to investing in fixed annuities, including:

  • Guaranteed income: Fixed annuities offer a guaranteed stream of income for life, which can help you avoid outliving your money in retirement.
  • Tax-deferred growth: The interest you earn on your annuity is tax-deferred until you start withdrawing. This can help you to save money on taxes.
  • Protection from market fluctuations: Fixed annuities are not subject to market fluctuations, so your money is protected from market downturns.
  • Death benefits: Most fixed annuities offer death benefits, which means that your beneficiaries may receive a payout if you die before taking the total amount of your money out of the annuity.

Drawbacks of Fixed Annuities

There are also a few drawbacks to investing in fixed annuities, including:

  • Lower returns: Fixed annuities often provide more modest returns than alternative investment choices like stocks or mutual funds.
  • Surrender charges: Withdrawing funds from your annuity before the conclusion of the surrender period could result in a surrender charge. The insurance company levies this fee to offset its initial expenses.
  • Limited liquidity: Fixed annuities are less liquid than other investment options, so it may be difficult to access your money if you need it.

Who Should Consider Investing in Fixed Annuities?

Fixed annuities may be a good investment option for investors who:

  • Are you looking for a low-risk investment option?
  • Are you concerned about outliving their money in retirement?
  • Are seeking a guaranteed stream of income.

How to Choose a Fixed Annuity

If you are considering investing in a fixed annuity, it is essential to research and choose an annuity that is right for you. Here are a few factors to consider:

  • Interest rate: The interest rate is the amount of interest your money will earn. Compare interest rates from different insurance companies.
  • Surrender charges: Surrender charges are fees you may have to pay if you withdraw your money before the surrender period ends. Be sure to understand the surrender charges before you purchase an annuity.
  • Death benefits: Some annuities offer death benefits. Consider whether or not you need death benefits.

Fixed annuities can be a valuable addition to your retirement portfolio. They offer a guaranteed stream of income, protection from market fluctuations, and tax-deferred growth. However, understanding the drawbacks of fixed annuities before investing is important. Be sure to research and choose an annuity that is right for you.

To ensure a fixed annuity aligns with your financial goals, consult a trusted financial advisor for personalized guidance.

  • Fixed Annuity: A low-risk contract with an insurance company for a guaranteed future income, with a fixed interest rate.
  • Types: Deferred (tax-deferred growth) and Immediate (start income immediately).
  • Phases: Accumulation (investment at fixed rate) and Distribution (withdrawals in retirement).
  • Benefits: Guaranteed life income, tax-deferred growth, market fluctuation protection, and death benefits.
  • Drawbacks: Lower returns, surrender charges, limited liquidity.
  • Ideal Investors: Those seeking low-risk options, concerned about retirement funds sufficiency, wanting guaranteed income.
  • Choosing an Annuity: Consider interest rates, surrender charges, and death benefits.


Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide –

And They Lived Happily Ever After

“Happily ever after” is typically the ending of a fairy tale.

But it’s more than that. It’s also the way we want to retire. What does it take to have a long and happy retirement? This has been the subject of study by Ph.D.s in countries around the world. Before I go on, how would you answer? What is it that makes a long and happy retirement? The answer may surprise you.

The research shows people who have guaranteed income for life tend to be happier and live longer. A Wall Street Journal article once said if you don’t have a pension, then buy yourself a guaranteed income with an annuity. The WSJ continued to state that concern over regular income is likely to create stress; instead, outsource your income concerns and invest your time in friends and relationships. Imagine not having to worry about income and being able to spend time with friends makes people happy! Who would have guessed?

You don’t have to take my word for it. Who are the happiest retired people, you know? Is it the ones watching their portfolio every day? Stressed out with market gyrations? Worried about market losses? Spending as little as they can so they don’t run out of money before they run out of life? Glued to a computer screen every day, watching their portfolio go up and down.

Or is it the people with pensions? You know, teachers, postal workers, government employees, and so on? The ones who get a check each month and are not worried about having a reliable income?

Financial security, and your happiness, are largely based on having guaranteed income for life.

The other day I spoke with a 74-year-old man living off of invested assets and Social Security. He’s been taking a little over 6% a year from his IRA for the last few years. What do you think he was worried about? The first words out of his mouth were, ‘I know I’m taking too much.’ He’s worried about running out of money and not having the income he needs. He has good reason to worry.

It’s been said the market always wins long term. Perhaps that’s true, but you need to win during your retirement. The SP 500 peaked slightly over 1,500 around July 2000, then lost nearly 50%. It recovered by July 2007 and then lost over 50%.  Can you afford to have volatility with your important retirement funds? 

This is why guaranteed income is so important in retirement. You’re not tied to results that you cannot control. There’s a significant difference between guaranteed income and statement wealth. During the last three market corrections, many people stopped even opening their IRA statements. Many retirees went back to work or attempted to do so. 

Retirees with guaranteed income went on vacation, visited family and friends, and spent time with their grandchildren. Take the time to analyze your income needs in retirement. Get at least your basic needs covered with the income you cannot outlive. Having income, you don’t have to worry about means you are free to do what you want. Build your retirement so you know you have the income you need. So when your children and grandchildren are talking about you, they will say. ‘

They retired and lived happily ever after. 

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide –

Choosing the Right Retirement Destination

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“Happily ever after” is typically the ending of a fairy tale.

Retirement represents a significant milestone, a phase that comes with a unique set of challenges. Many retirees struggle with critical issues such as financial security, healthcare access, and social connectivity. Fortunately, these challenges can be mitigated by making well-informed choices about where to retire and how to manage retirement savings.

The geographical location of your retirement can dramatically affect the quality of your golden years. Retirees often grapple with rising healthcare costs and limited access to quality medical facilities. By selecting a retirement destination known for its excellent healthcare infrastructure, retirees can ensure easy access to top-tier medical care and leverage lower healthcare costs prevalent in some regions.

Similarly, the cost of living varies significantly from one location to another. Choosing an affordable area to retire can help stretch your retirement savings further, ensuring financial stability. A location with a reasonable cost of living doesn’t necessarily mean compromising quality of life. Many affordable places offer vibrant community life, recreational facilities and are well-connected to major cities.

In addition, social isolation can pose a substantial problem for retirees, especially those who opt to retire in remote areas. Therefore, choosing a location that offers opportunities for social engagement is essential. Many communities cater specifically to retirees, providing social clubs, recreational activities, and shared interest groups to help retirees stay socially active and maintain their mental health.

While choosing the right retirement destination is crucial, making informed financial decisions is equally important to ensure long-term financial security. Safe money financial products, like fixed annuities, offer a dependable solution for retirees looking to secure a stable income stream post-retirement.

Fixed annuities, for instance, are contracts sold by insurance companies designed to provide guaranteed income. They act as a shield against market volatility and economic uncertainties, offering peace of mind for retirees. However, like all financial products, they have their pros and cons. The advantages include the security of a steady income and protection from market fluctuations, but potential disadvantages may include less liquidity and lower potential for growth compared to riskier investments.

Given the complexity of these financial products, it’s essential to seek advice from a professional advisor. They can help you understand the nuances of these products, gauge your risk tolerance, and align your financial decisions with your retirement goals.

Whether you’re just beginning to plan for retirement or transitioning into this new phase of life, addressing these pain points is essential. Choosing the right place to retire can greatly alleviate concerns about healthcare, cost of living, and social connectivity. Similarly, consulting with an advisor about safe money financial products like fixed annuities can ensure you attain the financial stability necessary to enjoy a worry-free retirement.

Start paving the way for a fulfilling and secure retirement today. Contact a trusted financial advisor who can help you navigate your financial options and determine if products like fixed annuities align with your retirement goals.

  • Selecting an ideal retirement location is a key step towards addressing challenges faced by retirees such as healthcare access, cost of living, and social isolation, with certain areas offering superior medical facilities, affordable living costs, and vibrant social environments.
  • ‘Safe money’ financial products, such as fixed annuities, offer a reliable solution for securing a stable income post-retirement, acting as a shield against market volatility and economic uncertainties.
  • Given the complexity of financial decisions during retirement, it’s crucial to consult with a professional advisor who can provide nuanced insights into financial products, helping retirees align their decisions with their retirement goals and risk tolerance.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

It is an Instant Download.  Here is a link to download our guide: 

Safe Money Guide –

Ready To Take


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