AARP Fixed Annuity: An Option for Senior Citizen Financial Security

May 8th, 2010 | By Sharon Shaw Elrod MSW EdD | Category: Senior Finances

AARP has again partnered with New York Life Insurance and Annuity Corporation to offer a fixed annuity, with an interest rate guaranteed for five years.  The program is available to AARP members ages 50-85 and spouses ages 45-85.

Fixed annuities are just that:  a legal agreement that the insurance company will pay the senior citizen a fixed rate of interest for a defined period of time.  In this instance, the rate of interest varies depending upon the amount invested in the annuity.  The unusual benefit of the AARP/NYL annuity is that the fixed rate is guaranteed for a five year period of time.  This is a group annuity, thus permitting the insurance company to make a more attractive offer than might be possible with an individual annuity.

You don’t pay taxes on your earnings until you withdraw them, meaning the money that you would have paid in taxes stays in the annuity earning interest until you withdraw it.  There is also a 100% money-back guarantee with this annuity; you will never receive less than what you invested originally in the annuity.  And you can withdraw up to 10% of your money every year without a surrender charge.  However, such charges may apply if you withdraw more than 10% of the account value.

AARP endorses this annuity and it is guaranteed by New York Life Insurance and Annuity Corporation.  SCJ visitors are encouraged to go to the NYL website that explains this annuity and get more details and information.  You must be an AARP member to apply.



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