Understanding The Benefits Of A Fixed Index Annuity

By Author: Lorraine Warren
Total Articles: 3
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But when saving and investing for retirement, there are three primary considerations: security, growth and flexibility. For many retirees those desiring to arm your savings but still can participate in some of the potential market earnings, a fixed index annuity is a good balance of protection and access to growth, which is why it’s been getting quite popular as a retirement planning option those who want to help protect their savings yet still be able to take advantage of some of the potential market gains.
What is a fixed index annuity (FIA)?
A fixed index annuity (FIA) is a contract between you and an insurance company that can offer you an income you can't outlive in retirement and preservation of your money. It is not a conventional security like a stock or a bond. Unlike variable annuities, your money is not all invested in the market right away. The insurance company, in turn, pays interest based on changes in the index, subject to caps, spreads or participation rates. This build affords growth potential with the least amount ...
... of downside in potential market downturn circumstances.
Key aspects of a fixed index annuity
Growth potential with protection: Fias can provide the potential to earn interest based on participation in the appreciation of the index to which they are linked, without the risk of loss of premium due to market downturns.
Tax-deferred growth: Money grows tax-deferred; there are no taxes until you start taking it out.
Optional riders: Fias will often offer features like income riders, which will pay lifetime income, regardless of what is happening in the markets.
Benefits of a fixed indexed annuity
No risk: Your money is not at risk and is protected from loss, even if the market declines.
Market upside participation: Although profits are held back, you participate in a rise in prices.
Lifetime income: Income riders may allow Fias to offer guaranteed payments for your entire life.
Estate planning advantages: With an FIA, beneficiaries may receive any remaining funds directly without having to go through probate.
My annuity agents: Directing you toward security
What are fixed index annuities? My annuity agents work with expert advisors who can teach clients how fixed index annuities work. They offer tailored advice to help your retirement plan match your long-term financial goals.
Final thoughts
Think of a fixed index annuity as having its cake and eating it too a liquid account with strong principal protection and some growth potential based on a percentage of the participation in the market. And, with the bonus of guaranteed lifetime income options, that can be a powerful tool for generating financial security in retirement. Chatting with some pros can help you determine whether a fia is the way to secure your financial future.
This article's author is Lorraine Warren. For additional information regarding fixed index annuity continue browsing our website at:myannuityagents.com.