: 88 year old mother considering Fidelity & Guaranty Life FG Guarantee-Platinum 7 annuity (being pressured into) My 88 year old mother is considering buying an annuity FG Guarantee-Platinum 7, single premium, fixed, deferred

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The main benefit of a fixed annuity is a guaranteed rate of return with no principal risk. Taxes are deferred until earnings are withdrawn (LIFO).

Annuity features and riders vary from company to company. To be considered are:

1) Is the 4% guaranteed for the entire 7 years or is there a possibility of a reset during that period?

2) What amount of partial withdrawals are permitted? If so, does your mother intend to withdraw the interest yearly?

3) What are the surrender charges?

4) What riders are included in the policy regarding illness, disability or death?

You can get a 3 month CD paying 2% or a two year CD paying 3%. If the yield is the issue, a 4% fixed annuity is the better choice, assuming that there are no annuity 'catches'. If accessibility is an issue, shorter duration at a lower yield may be the better choice. It isn't a question of whether an annuity is a good idea for an elderly person but whether the terms of the policy are the best alternative for your mother. It all depends on her needs. The decision is whether the 4% yield is an acceptable return for tying up the money for 7 years.