Indexed Interest Potential With A
Fixed Index Annuity
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Fixed Index Annuity
You Deserve Choices
Given the term “fixed,” you might assume that this type of annuity offers no flexibility. However, a fixed index annuity could actually provide lots of choices. For one thing, you may have a chance to decide which index you want. Although you are not purchasing stocks or funds, you can choose an external index to determine your interest. Your fixed index annuity would grow interest based on changes in the index you chose. You may even be able to select how much of your annuity to connect with specific indexes.
The crediting method is another choice annuity buyers have. Essentially, the insurance company uses a set of rules and timeframes to calculate the index interest, if any, paid on your annuity. You may choose an annual or monthly crediting method, for example. In addition, some crediting methods use an average value over a period of time. Others base their interest on the differences in rates over that same period of time. Still, the most advantageous feature of a fixed indexed annuity is to lock in your interest on the anniversary date. One year later, and based on that change, the interest is calculated. Essentially, protecting your interest growth.
the First Rule:
Remember, a fixed index annuity has a great benefit. Your hard-earned money remains safe. So, even if you choose an index that drops in value, you won’t have any losses. In fact, the law requires your insurance company to keep your money safe. In this way, you have interest potential when your index performs well. Plus, you have protection from losses that the issuing insurance company provides. One way you achieve a reasonable rate of return over time is by the insurance company locking in your interest on your anniversary date. This means if a market downturn occurs, you are not only protected against losing your nest egg, but the insurance company also protects your earnings. For many retirees, knowing you won’t outlive your money is paramount.
Find Out if a Fixed Index Annuity Is Right For You
What Is The Growth Potential of a
Fixed Index Annuity?
In order to understand growth, let’s learn how the interest rate is determined on your annuity. Indexed interest is calculated by using the following method. First, select one or more indexes to align your annuity to. You won’t need to do this alone, however. Our team at Messina’s Wealth Management can walk you through it. You have many potential interest options from various indexes. Next, the insurance companies use a crediting method to track how well your chosen index(s) are doing. Finally, at the end of the year, the policy provider sets the interest rate.
When markets rise, you have the opportunity to earn more interest. If the index has dropped, your annuity’s value doesn’t. To clarify, these interest rates depend on index choices and crediting methods. Each situation is different. Accordingly, each choice an individual makes regarding their annuity will be different. When you meet with us at Messina’s Wealth Management, we review all these terms and make sure everything is clear. You can also learn more about specifics around a fixed index annuity by attending one of our seminars. Your retirement decisions may impact the rest of your life. So, seek out as much information as you can.
Looking to learn more about annuities?
Attend one of our sessions or schedule an appointment. Let’s find out if annuity income is right for you.