Broker Check

FIXED INDEX ANNUITIES

FIXED INDEX ANNUITIES

FIXED INDEX ANNUITIES

Fixed index annuities can help you accumulate money for retirement and provide guaranteed income after you retire. A fixed index annuity may be a good choice if you want the opportunity to earn indexed interest, but don’t want to risk losing money in the market.

WHAT IS A FIXED INDEX ANNUITY?

WHAT IS A FIXED INDEX ANNUITY?

A fixed index annuity is a contract between you and an insurance company. In exchange for the money you place in your annuity, the insurance company guarantees several benefits – including a steady stream of retirement income. And because it’s designed to help you prepare for retirement, a fixed index annuity provides certain tax advantages as well.

SIX REASONS TO CONSIDER A FIXED INDEX ANNUITY (FIA)

  1. ACCUMULATE FOR RETIREMENT
    FIAs offer the potential to earn interest based on changes in an external index. Annuities give you a choice of several indexes and even some exclusive index options.

  2. PROTECT YOUR PRINCIPAL
    Your contract can earn interest based on an external index, but you’re not actually buying any stocks or shares of an index. This means the money in your FIA (your “principal”) is not at risk due to market losses.

  3. GROW TAX-DEFERRED
    You don’t pay taxes on the interest your annuity earns until you take money out. This helps compound your interest, so the money in your contract can accumulate faster.

  4. GET FLEXIBILITY
    Some FIAs offer riders (either built in or at an additional cost) to help you address specific needs. They also offer a variety of crediting methods and flexible options for receiving income.

  5. RECEIVE GUARANTEED INCOME
    Annuities are designed to provide a reliable stream of retirement income, either for a set period or for as long as you live. Some FIAs even offer you the potential to get increasing income.

  6. LEAVE A LEGACY
    FIAs pay your loved ones a death benefit if you pass away before you start taking scheduled annuity payments. (And, if properly structured, the death benefit is not subject to probate.)
WHAT IS THE BEST AGE TO BUY AN ANNUITY?

WHAT IS THE BEST AGE TO BUY AN ANNUITY?

Many people buy annuities between ages 40 and 60, but the answer depends on your financial goals. If your main goal is saving enough for retirement, buying a fixed index annuity when you’re still a few years away from retirement may be a good choice. That’s because FIAs are designed to help the money in your contract grow tax-deferred over time. And the younger you are when you buy your annuity, the longer your money has to grow tax-deferred.

ARE FIXED INDEX ANNUITIES APPROPRIATE FOR RETIREMENT?

ARE FIXED INDEX ANNUITIES APPROPRIATE FOR RETIREMENT?

Fixed index annuities are designed to protect the money you place in the contract from market volatility. Although FIAs may credit interest based on changes in an external index, you’re not actually participating in the market – so the principal in your annuity is never at risk due to market losses. Fees and charges may still reduce your annuity’s value, however.

WHAT HAPPENS TO YOUR FIXED INDEX ANNUITY IF YOU DIE?

WHAT HAPPENS TO YOUR FIXED INDEX ANNUITY IF YOU DIE?

That depends on many factors, including whether you have started taking income from your annuity. Most annuities let you name a beneficiary. If you have not yet started taking regular income payments from your annuity (we call this “annuitization”), the money that’s left in your annuity will pass on to your beneficiary when you die. But some annuities may have different terms. That’s why it’s important to read and understand the contract before you buy any financial product, including an annuity.

WHAT DOES “PRINCIPAL PROTECTION” MEAN?

WHAT DOES “PRINCIPAL PROTECTION” MEAN?

It means the money in your fixed index annuity contract is not at risk due to market losses. Although FIAs may credit indexed interest based on changes in an external index, you’re not actually participating in the market – so the principal in your annuity is never at risk due to market losses. Fees and charges may still reduce your annuity’s value, however.

WHAT IS INDEXED INTEREST?

WHAT IS INDEXED INTEREST?

Simply put, it’s interest your contract earns based on positive changes in an external index. If the return is positive, you have the opportunity to earn indexed interest. But remember that with fixed index annuities you’re not actually participating in the market – so the principal in your annuity is never at risk due to market losses.

HOW IS INDEXED INTEREST CALCULATED?

HOW IS INDEXED INTEREST CALCULATED?

Indexed interest is determined through a combination of index allocation options and crediting methods. Every crediting period, you can place your cash value in one or more allocation options, which track the performance of an external index. If the external index has a positive result, the crediting method will determine how much indexed interest your contract will earn.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you.

info@wyattfinancialsolutions.com  |  833-777-2224