CD FIXED ANNUITIES

Warning

Yield-starved physician-investorssearching for better gains on theirmoney are turning to fixed annuitiesthat act like bank CDs. Unlike thetypical fixed annuity, which usuallyguarantees an interest rate only forthe first year and then changes theyield every year, the CD-like annuityguarantees the return for the life ofthe annuity—the longer the term, thehigher the rate. Like their variableannuity cousins, CD-like annuitiesoffer tax deferment, but they are no-loadinvestments (ie, there are nomanagement fees or expenses toworry about).When the annuity termis up, you can roll the money overinto another CD or take a lump-sumpayment. : If you cash out,your gains are taxed as ordinaryincome, plus there's a 10% penalty ifyou're under age 59½.