A fixed-index annuity provides the guarantees of fixed annuities, combined with the opportunity to earn interest based on changes in an external market index, for example the S&P 500, Nasdaq 100, and the Russell 2000. With a fixed-index annuity, because you’re not participating in the market, the money in your annuity (your “principal”) is not at risk. A fixed-index annuity may be a good choice if you want the opportunity for growth and accumulation, but don’t want to risk losing money in the market.
UNDERSTANDING THE BASICS
HERE ARE THE BENEFITS
A fixed-index annuity (FIA) offers a unique combination of benefits that can help you achieve your long-term goals. No other product offers the tax deferral, indexed interest potential, and optional benefits to protect your retirement assets and income.
WHO’S WHO IN A FIXED INDEX ANNUITY
Is a Fixed-Index Annuity Right for You?
The answer is, “maybe.”
Only you know your goals for retirement, so only you can determine your needs. A fixed-index annuity isn’t the right solution for everyone, and you shouldn’t buy one unless it’s appropriate for your situation.
You may want to consider a fixed index annuity if the following benefits are important to you:
- Tax deferral to help you reach your retirement goals
- Indexed interest potential to help accumulate your retirement savings
- Protection benefits that can help protect your retirement assets and income
Purchasing an annuity is an important decision, and one you should only make after consulting with your financial professional.
Because the guarantees on an annuity are important, it’s important to consider who backs those guarantees. The guarantees are backed solely by the insurance company that issues the annuity. That’s why you should know about the financial strength and stability of the company. Ask about their:
- Ratings – independent agencies’ opinions of a company’s strength and ability to meet its ongoing insurance policy and contract obligations.
- Risk Management Capabilities – a company’s track record of successfully hedging against potentially extreme market events.
- Management Philosophy – a company’s commitment to stability and reliable, long-term performance.