Fixed Indexed Annuities

What Is a Fixed Indexed Annuity?

A Fixed Indexed Annuity (FIA) is a financial product designed to help you grow your retirement savings while protecting you from the ups and downs of the market. Unlike traditional investments, where you risk losing money during market downturns, an FIA allows your savings to grow safely based on the performance of a market index, such as the S&P 500, with a guaranteed floor that protects your principal.

How Does a Fixed Indexed Annuity Work?

1.) Interest Linked to a Market Index:

With an FIA, your interest earnings are tied to the performance of a market index, like the S&P 500. However, you don’t directly invest in the market. This means you can capture some of the market’s gains when it rises, but your savings remain protected from losses when the market falls.

2.) Guaranteed Principal Protection:

One of the standout benefits of an FIA is its principal protection. Even in a down market, your initial investment and any credited interest remain safe, giving you peace of mind as your money grows.

3.) Tax-Deferred Growth:

Like other retirement accounts, FIAs grow on a tax-deferred basis, meaning you won’t pay taxes on your earnings until you start withdrawing the funds. This allows your savings to compound over time, maximizing your retirement nest egg.

4.) Guaranteed Income for Life:

Many FIAs offer the option to convert your savings into a guaranteed lifetime income stream. This ensures you’ll have a reliable income throughout your retirement, even if your account balance is depleted.

The Benefits of Fixed Indexed Annuities

1.) Growth Potential Without the Risk:

FIAs allow you to benefit from the market’s growth without the fear of losing your principal. When the market performs well, you can see your savings grow. When the market declines, your savings are protected.

2.) Flexibility and Customization:

FIAs can be structured to meet your individual financial needs, including offering options for guaranteed lifetime income, death benefits, and inflation protection. This makes them a versatile tool for both conservative and growth-focused investors.

3.) Tax Efficiency:

FIAs grow on a tax-deferred basis, allowing your savings to accumulate faster. This feature can make a significant difference in your long-term financial growth.

4.) Peace of Mind:

Perhaps most importantly, FIAs offer financial security. In a world where markets can be volatile, knowing that your money is safe gives you confidence as you approach retirement.