One of the questions that you need to concern yourself with in the market of annuities is the annuity rate that you are getting. When you purchase your annuity, you have to choose your financial future depending upon several factors. One of which is the rate of return that you are going to receive on your annuity.

When you are faced with the decision about your future income needs based on the income from an annuity, you need to consider two choices: should you purchase an annuity with a fixed rate of return or a variable rate of return? Both provide income, however you must understand how both can affect your long term financial situation.

A fixed rate annuity will generate guaranteed income for the length of the annuity. Since it has a fixed rate, it might be lower than what you could earn with a variable rate, however it is more secure and stable. A variable rate can fluctuate depending upon what the stock market and treasury market are doing, so if those “crash” then your income is dramatically affected.

Learn more about how the annuity rate you choose can affect your income in the future before you decide.