The Basics And Benefits of FIAs
Understanding Fixed Indexed Annuities
Retirement Annuities
You may be considering ways to protect your retirement income as you plan for retirement. One option to consider is retirement annuities. Retirement annuities provide a guaranteed income stream after retirement. Various types of annuities are available. Our goal is to provide you with the information to choose which one is right for you.
What are Annuities?
An annuity is a type of insurance policy that provides a steady income in retirement. A number of different types of annuities exist, which can either be fixed or variable. The different types of annuities offer different features that may assist you in reaching your financial goals.

How Do Annuities Work?
As an example of how an annuity works, let’s look at fixed index annuities. A fixed indexed annuity (FIA) provides you with retirement income while allowing you to defer taxes. Compared to variable annuities, they have a higher growth potential in interest. Also, they also have less risk than a variable annuity.
An FIA tracks the performance of an underlying index, such as the S&P 500. They provide some of the advantages of index funds while not being directly linked to an index. This is because an FIA is an insurance policy and not an investment. As a result, fixed index annuities usually protect against principal loss even when the market falls.
Fixed Index Annuities and Interest Rates
The insurance industry typically sets annuity rates. The insurer guarantees your earnings. The providers we work with are highly reputable and reliable. FIA’s are low-risk, but it protects loss fo your principal. So, you can earn a reasonable return while keeping your assets.
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Two Phases of Annuities
Annuity contracts have two stages. Although every type of annuity is different, these two phases apply to all annuities. They are accumulation and distribution.
The Accumulation Phase
During the accumulation phase, you save and build up the value of your retirement funds.
The Distribution Phase
In the distribution phase, you begin receiving payments from your annuity to create an income in retirement.
Benefits of a Fixed Index Annuity (FIA)
Fixed index annuities offer guaranteed retirement income over the long term. They have several advantages.
Tax-deferred earnings are accrued in fixed indexed annuities. Interest on these retirement annuities is not taxable until you withdraw it. Therefore, this allows compound interest to grow.
Retirement annuities are designed to provide income during retirement.
You earn interest on your contract based on an external index. However, you are not buying stocks or shares of the index. So, your FIA is therefore safe from market losses.
The death benefit goes to your beneficiaries after you pass away. Properly structured death benefits can also avoid probate.
Find Out More About FIAs
When you are considering retirement annuities, be sure they meet all your needs. We can walk you through all the options. Register for a retirement seminar or schedule a meeting with us at no cost.