Is a Fixed Indexed Annuity right for you?  

A Fixed Indexed Annuity is a conservative investment that is ideal for someone who is either near retirement or in retirement, and they want to start protecting their IRA, 401(k), or Federal Employee TSP account from market downturns.  As you get closer to retirement, you typically want to start pairing back your risk, so if there is a market downturn, your retirement account won't suffer a huge decrease.   A Fixed Indexed Annuity can accomplish this for you because you are guaranteed not to sustain a loss when the market decreases. 

A Fixed Indexed Annuity is different from a Fixed Annuity.  A Fixed Annuity guarantees a fixed rate of return, usually around 2% to 3% per year.  A Fixed Indexed Annuity tracks an Index throughout the year, for example the S&P 500 Index, and it calculates the amount of interest that you earn based on how well the index performs.  If the index goes positive for the year, you will earn a portion of the gains.  If the index goes negative for the year, you just receive zero interest for that one year, but you lose no value in your account.  The worst you can do in any one given year in a Fixed Indexed Annuity is have zero interest paid to you, but you lose no value in your account.  It's like investing with guardrails on.  If the market increases in a year, you get to participate in some of those good returns; However, if the market decreases in a given year you just receive zero interest, but you lose no value in your account. 

One major advantage of a Fixed Indexed Annuity is you not only protect your principal from market loss, but you also protect any of your earnings along the way from market loss.  For example, let's say we have three consecutive years of positive returns in the Index, but in the forth year, the Index goes negative.  You will not loose any of the interest you earned in the prior three years because anytime you earn interest in a Fixed Indexed Annuity, it captures and protects your earnings from future losses. If you would like to learn more about how to protect your retirement accounts from market downturns, please let us know!

Our agency specializes in helping clients with qualified rollovers from their IRA's, 401(K)'s or Federal Employee TSP accounts into Fixed Indexed Annuities.