Retire Safe & Tax Free - The Fixed Index Annuity Advantage

When will interest rates rise? Is the market headed up or down?

Many consumers near or in retirement have chosen to adopt a wait-and-see approach when it comes to their retirement savings. They have elected to remain in very conservative financial products because they are uncertain where to place their money, they consider current market conditions poor and they fear losing their hard-earned money altogether.

If you have assets in conservative products such as CDs or money market accounts, there may be opportunities in which using a fixed index annuity could help make your money work harder, now and in the future.

One Consumer's Story

Consider this example: Using $100,000, you purchase a five-year certificate of deposit (CD) and receive a jumbo rate of 0.84% for the duration of your term. At the end of the five years, your account value will be $104,271.

But let's say with that same $100,000, you instead choose to purchase a fixed index annuity, including a 4% guaranteed minimum accumulation benefit and choosing the performance trigger crediting strategy, tied to the S&P 500.

During the same five-year period, the S&P 500 records a negative return for two consecutive years. Your principal in the fixed index annuity is protected from these downturns and retains its value.

Over the remaining three years, however, the S&P 500 has a positive return and your contract value grows by 3% for each of those years, resulting in an ending value of $109,273 - $5,002 more than the CD. Plus, your contract value continues to grow tax deferred for the entire time. Even if the S&P was down for all five years, at the end of year five the 4% guaranteed minimum accumulation benefit would increase your contract value by 4% to $104,000.

An added benefit of a fixed index annuity? A fixed index annuity can create a guaranteed stream of income you cannot outlive. A CD simply cannot do that.

Now, more than ever, fixed index annuities deserve consideration as part of your retirement strategy. No matter the economic environment, a fixed index annuity can:

  • Protect your principal from negative market fluctuations
  • Provide a greater opportunity for interest crediting than many other fixed alternatives
  • Offer tax-deferred growth
  • Create flexible options to receive retirement income for as long as you live

Contact: Marc H. Weiss, Archer Weiss Insurance and Financial Services

(818) 610-8560