Annuities
Understand the Benefits
Understanding Annuity Benefits
Annuity benefits differ from product to product. Fixed indexed annuities (FIAs) come with a number of beneficial features.
For example, the level of protection they provide. They may differ from other types of annuities in this way. Everyone has their unique financial situation, goals, and needs, and this is why it’s important that you understand your options. How much have you saved for retirement, and what accounts are you keeping it in? Also, where will your money go? What types of things will you need to spend it on?
Many retirees forget to factor in things like taxes and inflation into their budget for retirement. However, these details do impact your retirement. However, annuities come with certain benefits that may be able to help.
Benefits and Options of FIAs
In order to make the best decisions in regards to your retirement, you need to understand as much as you can about your options. We can provide you with info on FIAs. Here are the main benefits of FIAs:
First, an FIA can help if you're looking to keep your money safe from market loss.
This is because an FIA is an insurance product, and the insurance company is required to keep your principal safe. The company backs the guarantee of safety, so be sure you select a reliable one. We try to work with the most trusted and reliable companies in the industry.
Second, an FIA may offer you reasonable rates of return.**
Unlike some other options, an FIA’s principal balance doesn’t drop in the event of a stock market downturn. However, the FIA can still gain money when the market is up, because it grows based on the performance of an index or indexes. This allows for reasonable rates of return over time.
And third, fixed indexed annuities tend to offer a straightforward, simple approach to retirement.
Remember, you don’t have to track market trends when you have an FIA. This is because there is no risk to your money in the event of a market drop. The combination of safety, reasonable rates of return,** and simplicity makes an FIA a potentially very beneficial tool to save money for retirement.
Specifics of an Annuity Contract
An FIA is a contract with an insurance company. You contribute a set amount of money. Then, they keep that money safe, while it gains interest based on the performance of a stock market index. The time during which you let your money grow, called the accumulation phase, usually lasts five to ten years. However, this will vary depending on the terms of your individual contract. It could be longer. Then, when this period ends, you may take the money as income payments.
FIAs and the Stock Market
Of course, an FIA has the benefit of offering protection on your principal. In other words, you won’t lose any of the money in your FIA when the market goes down. In terms of the ups and downs of the market, the annuity has a “floor” that it cannot go below. Of course,this benefit is backed by the claims-paying ability of the insurance company. For this reason, it’s important to learn as much as you can before purchasing an FIA. Make sure you know what choice is best for you.