Insurance Investments

Reasons to Buy a Fixed Indexed Annuity


If you are looking for a product that is built to offer better returns than CDs (certificates of deposit), fixed-indexed annuities are a fairly conservative investment offered by insurance companies. Fixed indexed annuities are great products to own if you are nervous about upcoming market volatility, and want to take some risk off the table. Here is a bit of information about this relatively new insurance product.

FIA’s Offer a Guaranteed Income Stream

With Americans living longer and spending more time in retirement, many retirees are concerned about outliving their savings. In turn, they are searching for a product that can help ensure a steady income stream. Fixed indexed annuities (FIAs) are designed with guaranteed lifetime income so you can never outlive your earnings.

Diversify Your Portfolio with a Fixed Indexed Annuity

A balanced portfolio is essential for managing risk and reward in the financial markets. Designed for the long term, fixed indexed annuities (FIAs) are a great retirement vehicle to ensure you are not putting all your eggs in one basket. FIAs offer the ability to make some money, without the risk of losing it.

Your Principal is Safe with a Fixed Indexed Annuity

Even with market volatility, investors will not lose value on their fixed indexed annuities (FIAs). Your savings aren’t exposed to market fluctuations, so even in a negative market return, interest credited will never fall below zero. You can never lose your interest once it’s credited to your principal.

Fixed Indexed Annuities will Let You Predict Earnings

Because fixed indexed annuities (FIAs) offer predictable income, Americans feel more comfortable when withdrawing funds from these retirement vehicles, as opposed to an IRA or 401(k). Choosing an FIA is an efficient way to plan for your future, as your interest earnings rate always remains somewhere between the interest rate floor and the cap. In turn, no matter what happens in the market, you can count on payments throughout your golden years.

Tax-Deferred Growth with Fixed Indexed Annuities

Fixed indexed annuities (FIAs) offer long-term tax-deferred savings. As long as your money stays in the annuity, you will not be taxed on interest earnings. Once you receive a payout, the annuity is taxed as ordinary income.

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