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Fixed annuities are a type of annuity that can provide a level of protection for a portion of your retirement accounts when the markets crash. Here are some key points to consider:

What is a fixed annuity?

- A fixed annuity is an insurance contract that guarantees the buyer a fixed rate of return on their contributions for a specific period of time.

- The principal investment is not invested in the stock market, but rather with the insurance company, which means that the original investment is safe.

- Fixed annuities are not affected by market crashes, and they will continue to earn interest or provide you with income as specified in the contract.

How do fixed annuities compare to variable annuities during a recession?

- During a recession, variable annuities pose much more risk than fixed annuities because their performance is tied to market indexes, which recessions tend to pummel.

- The value of a variable annuity fluctuates and poses the greatest risk to an investor during a recession.

- Though fixed annuities provide peace of mind during recessions, they tend to underperform, at least compared with their variable counterparts, when the economy is doing well.

Why are fixed annuities a good option during a market crash?

- Fixed annuities provide a level of protection for a portion of your retirement accounts when the markets crash.

- They can provide a guaranteed income stream for life, which can help ensure that you have a steady stream of income during retirement.

- Fixed annuities can also provide a level of predictability and stability during times of market volatility, which can help reduce stress and anxiety.

What are some drawbacks of fixed annuities?

- Fixed annuities tend to have lower returns compared to other investment options, such as stocks or mutual funds.

- They may also have higher fees and surrender charges, which can reduce the overall return on investment.

- Fixed annuities may not be suitable for all investors, and it's important to carefully consider your financial goals and risk tolerance before investing in one.

In conclusion, fixed annuities can provide a level of protection for a portion of your retirement accounts when the markets crash. They offer a guaranteed interest rate and principal protection, which can provide peace of mind during times of market volatility. However, it's important to carefully consider the potential drawbacks, such as lower returns and higher fees, before investing in a fixed annuity. As with any investment, it's important to consult with a financial advisor to determine if a fixed annuity is a suitable option for your financial goals and risk tolerance.