Understand the Benefits
Work with MTD Financial to Understand the Benefits of Annuities
Retirement Annuity Overview
Understanding Fixed Indexed Annuity Benefits
In preparation for retirement, you may be seeking ways to grow and protect your income. Many individuals look into a retirement annuity as a part of their strategy because of the benefits they offer.
Key Benefits of a Fixed Index Annuity (FIA)
FIAs have several advantages. In addition to protecting your principal from loss, FIAs guarantee* your retirement income. Here are some advantages of fixed index annuities.
Earnings accrue tax-deferred in a fixed-index annuity. Tax-deferral allows compound interest to grow.
A retirement annuity is designed to ensure a guaranteed* income stream in retirement.
An FIA tracks the performance of an index such as the S&P 500 or Nasdaq. However, but they are not directly linked to any index. Due to this, they offer some of the same benefits as index funds. At the same time, your principal is protected from losses.
An FIA tracks the performance of an index such as the S&P 500 or Nasdaq. Regardless of market conditions, a fixed index annuity will grow with a set interest rate. As a result, your money grows over time. However, they are not directly linked to any index. Due to this, they offer some of the same benefits as index funds. At the same time, your principal is protected from losses.
After your death, your beneficiaries receive the death benefit. If it is structured properly, the beneficiary will not be subject to probate.
Interest rates of an FIA
A few factors determine an FIA’s index rate. In most cases, insurance companies set annuity rates. And, your earnings are guaranteed by the insurer. Therefore, you won’t lose money despite the fact that it’s a low-risk purchase. So, you can maintain your assets while earning a reasonable return**.
The Stock Market and Fixed Index Annuities
Fixed index annuities follow the movement of an index, such as the S&P 500 or Nasdaq. Therefore, they offer some of the same benefits but they are not linked directly to an index. Instead, insurance companies guarantee a minimum rate of interest. If the stock market falls, the insurance company bears the risk, not you. FIAs maintain the same interest rate regardless of market changes. So, a decline in stock markets will not affect your FIA.
Find Out More About FIAs
When considering a retirement annuity, make sure it meets your needs. You can explore all your options in detail with our team at MTD Financial. Register for one of our informational seminars with a gourmet meal in Chicago and surrounding areas.
