Fixed Indexed Annuities
A fixed indexed annuity is a tax-deferred, extended-term savings plan. It protects your deposit from market downturns while offering growth potential. It offers more growth than a fixed annuity but less risk and returns than a variable annuity.
Returns depend on the performance of a market index, like the S&P 500, which includes a broad range of stocks. Although the index reflects market trends, your money is not directly invested in the stock market.
For expert guidance and access to over 50 A+ rated carriers, contact Doyle Assurance Group. We can help you find the best fixed index annuity rates to match your financial goals and provide long-term security. Contact us today for personalized support and solutions.
Top Benefits of Fixed Index Annuity
Secure Your Investment
Fixed indexed annuities (FIAs) protect your initial deposit, ensuring it remains safe even if the market index linked to your annuity underperforms.
Opportunity for Enhanced Returns
FIAs are tied to stock market indexes, providing the chance for higher returns compared to traditional fixed annuities. Gain from market upswings within predetermined limits.
Loss Floor Protection
A fixed index annuity often includes a loss floor, limiting your losses even during a poor market year. Typically set at 0%, you’ll at least break even in a downturn.
Tax-Deferred Earnings
Income Options
You can convert your FIA balance into a regular income stream when ready. Payments can be for a set period, like 20 years, or your lifetime. The amount depends on your balance, investment return, and the duration of payments; longer periods result in smaller payments.
Death Benefit
If you pass away before receiving annuity payments, your beneficiaries will receive the contract or minimum surrender value.
Factors Affecting Fixed Indexed Annuity Rates
Best fixed index annuity insurance options don’t have an upfront fee. Instead, the annuity company deducts its fees annually from your account balance. Some of the factors that impact it include:
Mortality Expenses
Mortality and expense (M&E) fees cover the annuity company’s costs for providing future income guarantees and contract management.
Administration Fee
The annuity company may charge an administration fee annually. This fee covers account management costs, including record-keeping and customer service. It’s deducted from your account balance annually.
Riders
Riders are optional add-ons that provide additional benefits to your annuity contract. For example, a rider might guarantee a minimum return over the contract’s life. Each rider has an annual fee added to your total annuity costs.
Surrender Charge
A surrender charge applies if you cancel your fixed index annuity or withdraw large amounts during the initial years. This fee compensates the company for early termination or significant withdrawals that affect your returns.
Doyle Assurance Group offers over 50 A+ rated carriers with flexible fixed indexed annuity rates. Contact us for options today!
FAQs
What is a fixed indexed annuity (FIA)?
A Fixed Indexed Annuity (FIA) is a retirement savings option that links your growth potential to a stock market index. It provides the opportunity for higher returns while safeguarding your principal from market declines.
How is a FIA different from a traditional annuity?
FIAs link returns to a market index, unlike traditional annuities with fixed returns. This provides an opportunity for greater growth while keeping your principal investment secure.
What happens to my FIA if the stock market declines?
In an FIA, your principal is protected from losses, even if the linked market index declines. The guaranteed minimum interest rate ensures your investment remains secure despite market downturns.
Can I lose money in a fixed indexed annuity?
Your initial investment in an FIA is typically safeguarded against market declines. However, if you withdraw funds early, fees or surrender charges could reduce your principal.
What are the tax benefits of an FIA?
With an FIA, you benefit from tax-deferred growth, so your investment compounds without immediate tax impacts. Taxes are only due when you withdraw funds, enhancing your investment’s overall growth and efficiency.
Do FIAs Have Limits on Potential Returns?
Yes, FIAs typically set limits on returns through caps or participation rates, even if the linked index performs very well. This is offset by the protection of your principal investment.
Can I retire on an FIA?
Yes, many FIAs allow you to convert your annuity into a steady income stream for retirement. This option provides financial stability and peace of mind.
What are fixed index annuity rates?
FIAs generally have lower fees than other market-linked investments. However, they may include administrative fees or charges for extra riders. Understand the fee structure before investing.
Will an FIA suit me?
An FIA balances growth potential with principal protection, making it a good choice if you’re nearing retirement. Determine your financial goals, risk tolerance, and retirement plans to see if an FIA aligns with your needs.
Can I take out my FIA funds before retirement?
You can access FIA funds early, which may involve surrender charges and tax penalties. These penalties are especially likely if you withdraw before age 59½. FIAs are ideal for long-term retirement investments.