Fixed annuities are long-term investments designed for retirement purposes. Guaranteed interest rates are based on the claims-paying ability of the underlying insurance company. Surrender charges may apply. Withdrawals are subject to ordinary income taxes, and if made prior to age 59 1/2 may be subject to a 10% penalty. Additional benefits and riders may increase the cost of the premium or lower the interest rate. Tax deferral is of no additional benefit if annuity is held in a retirement account such as an IRA or 457 (b) plan.