Request Reprint Send us your request to reprint copyrighted material. Deferred annuities are offered by insurance companies. They allow investors to defer any taxable income earned by the dollars invested until investors should decide to withdraw some or all of their funds. The principal invested is guaranteed by the insurance company.
Interest is earned on the money invested at a fixed rate for either one or more years.
The insurance company does not guarantee the principal. Instead, the insurance company will typically offer a number of different investment portfolios managed by portfolio managers from well known mutual fund companies. Deferred annuities are definitely not for everyone. It is not a short-term investment. One variable annuity that I just recently invested in offers 48 different investment options including portfolios managed by Janus, Invesco, Alger, Aim, Rydex, Pimco and others.