Fixed annuities promise tax-deferred growth at guaranteed rates. But the shelter they offer can end up a trap.

With the uncertainty of the market these days, a lot of investors are running for cover with their retirement funds. No wonder sales of fixed annuities surged 74% for the first three months of 2009, according to research association LIMRA.

These insurance products provide tax-deferred growth at a fixed rate – higher than that of CDs now – with the option to later turn the money into guaranteed income for life. It’s a compelling pitch. But there’s a costly catch. Getting into a fixed annuity today may force you to miss better opportunities tomorrow. Continue reading →