Fixed Index Annuities
With extended life expectancies, rising healthcare costs, and more of a demand being placed on personal savings to fund retirement, it’s no wonder that so many Americans are worried about outliving their income in retirement. To help address these concerns, let’s explore a financial product that has gained popularity over the years designed exclusively for retirement income – the Fixed Index Annuity
SO WHAT IS A FIXED INDEX ANNUITY?
A Fixed Index Annuity, or FIA, is a financial product that is set up as a contract between a contract owner (the buyer) and an insurance company (the seller). FIAs offer a unique combination of benefits that can help achieve long-term retirement goals. No other product offers the tax deferral, indexed interest potential, and optional benefits to protect your retirement assets and income. A set premium, either a one-time payment or a series of payments determined by the individual contract, is paid to an insurance company who in turn guarantees to pay no less than a minimum rate of interest either starting immediately or at some time in the future. During the payout period, the amount of each income payment is generally set when the payments start and are based on the life expectancy of the annuitant (the person who buys the FIA). Today’s Fixed Index Annuities offer a range of features and benefits that can help accumulate assets for retirement, preserve assets saved, turn those assets into a guaranteed stream of income for life, and help to provide a financial legacy to loved ones through the death benefit offered with most fixed annuities.
Fixed Index Annuities are designed to meet long-term needs for retirement income. They provide guarantees against the loss of principal and credited interest, and offer the reassurance of a death benefit for your beneficiaries. Early withdrawals may result in loss of principal and credited interest due to surrender charges. Any distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. Terms and conditions vary by Carrier, product and state.
Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.