Worried about your retirement savings? Between a confusing economy, potential market drops, and rising costs, it can be tough to feel confident about maintaining your lifestyle in retirement. It's crucial to find solutions that can not only grow and protect your nest egg but also provide a guaranteed source of income that you can't outlive. Thankfully, there are options that can help!
What is a Fixed Indexed Annuity?
A Fixed Indexed Annuity (FIA) is a contact between you and an insurance company. It offers a way to protect your 401k from taxes and ensure a steady stream of income in the future, just like a pension!
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Unlike owning company stock in the S&P 500, which could result in a total loss of your principal investment, annuities offer guaranteed tax-deferred growth with fixed interest rates and both your principal and gains are 100% protect against any negative performance of the S&P 500!​
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Some companies even offer an immediate bonus, meaning your balance gets a 30% -40% bonus on day 1. Forget about one day, how many times has your money earned 30-40% in one year? Mostly likely, never. Companies even off fixed interest for a certain number of years. For example, Nationwide's New Heights Select 9 Annuity earns a fixed interest rate of 9.5% every single year for 10 years! That means, you know exactly how much money you will have, at minimum, 10 years later. Where else can you get a guaranteed 9.5% return on your money, ever year, for 10 years?
How Does An Annuity Work?
When you buy an annuity, you deposit a lump sum of money, usually $10,000 or more, that may come from your checking/savings account, a 401k, 403b and/or IRA. Once the money is deposited, your money will begin earning tax-deferred compound interest. Tax deferred means that you don't pay taxes while your money is growing, but you will pay taxes in the future once you withdraw any amount money. The purpose of the annuity is to put that money aside for a period of time so it can earn tax-deferred compound interest, year after year.
IRA
401k
403b
Subject to Market Risk +/-
No Death Benefit
No Lifetime Income
"Rollover" Into An Annuity
FIXED INDEXED ANNUITY
Guaranteed No Losses
Has a Death Benefit
Lifetime Income Just Like a Pension
When it's time to start receiving your annuity installments, you can choose one of two options: regular, fixed payments or a lump sum payout.
Some companies offer a bonus!
When you buy an annuity, you deposit a lump sum of money, usually $10,000 or more, that may come from your checking/savings account, a 401k, 403b and/or IRA. Once the money is deposited, your money will begin earning tax-deferred compound interest. Tax deferred means that you don't pay taxes while your money is growing, but you will pay taxes in the future once you withdraw any amount money. The purpose of the annuity is to put that money aside for a period of time so it can earn tax-deferred compound interest, year after year.
