Stability and Growth | Decoding Fixed Indexed Annuities

What is a Fixed Indexed Annuity (FIA)?
An FIA is a retirement savings product providing growth potential based on a stock market index while protecting your principal from market downturns.
How is an FIA different from a traditional annuity?
Unlike traditional annuities with fixed returns, FIAs offer returns tied to a market index, providing the potential for higher growth while still safeguarding your principal investment.
What happens to my FIA if the stock market declines?
In an FIA, your principal is protected even if the linked market index performs poorly, thanks to the guaranteed minimum interest rate, ensuring that your investment isn’t lost due to market downturns.
Are there limits on the potential returns in an FIA?
Yes, FIAs typically have caps or participation rates that limit the maximum return you can receive, even if the linked index performs exceptionally well. This is a trade-off for the principal protection feature.
Can I lose money in a Fixed Indexed Annuity?
The principal investment in an FIA is generally protected from market losses. However, early withdrawals might incur fees or surrender charges, potentially reducing your principal.
What are the tax benefits of an FIA?
FIAs offer tax-deferred growth, meaning you don’t pay taxes on the earnings until you withdraw the funds, allowing for more efficient growth of your investment.
Can an FIA be used for retirement income?
Yes, many FIAs offer the option to convert your annuity into a steady income stream during retirement, providing financial stability and peace of mind.
Are there fees associated with FIAs?
While FIAs typically have lower fees compared to other market-linked investment products, some may have administrative fees or charges for additional riders. It’s important to understand the fee structure before investing.
Is an FIA suitable for me?

An FIA may be suitable if you’re looking for a balance between growth potential and principal protection, especially if you’re nearing retirement. Consider your financial goals, risk tolerance, and retirement plans when deciding if an FIA is right for you.

Can I access my funds in an FIA before retirement?
Early access to FIA funds is possible, but early withdrawals may incur surrender charges and tax penalties, particularly if taken before age 59½. FIAs are best viewed as long-term retirement investments.