• Annuities are financial products offered by insurance companies that are designed to help individuals accumulate funds for retirement and/or generate guaranteed income for a set period—or for life. There are several types of annuities, but they all share the same core purpose: to provide financial stability, especially during retirement years.
  
  

  What is a Fixed Indexed Annuity (FIA)?

  One popular type is the Fixed (Equity) Indexed Annuity (FIA). FIAs offer a balance of growth potential and protection. Your money isn’t directly invested in the stock market—instead, it earns interest based on the performance of a market index (like the S&P 500). The key benefit? When the market performs well, you can earn interest up to a certain cap or participation rate. But when the market drops, your principal is protected—you won’t lose money due to market downturns.

  FIAs can also be structured to provide guaranteed lifetime income, making them a powerful option for those who want the opportunity for growth without risking their retirement nest egg.

  ---

  Key Features of Fixed Indexed Annuities:

  1. Principal Protection

     • Your original investment (premium) is protected from market losses.

     • Even if the index performs negatively, your annuity value won’t decrease due to market performance.

  2. Index-Linked Interest

     • Interest credited is based on the performance of a selected index.

     • Growth is subject to limits such as:

       • Cap Rate – the maximum interest you can earn in a period (e.g., 8%).

       • Participation Rate – the percentage of index growth you’re credited (e.g., 80% of a 10% index return = 8% credited).

       • Spread – a certain percentage subtracted from the index return (e.g., index gains 10%, spread is 2%, you get 8%).

  3. Tax-Deferred Growth

     • You don’t pay taxes on your earnings until you start withdrawing them, allowing your money to compound more efficiently over time.

  4. Guaranteed Lifetime Income (Optional Rider)

     • Many FIAs offer income riders that guarantee a stream of income for life, regardless of how the market or account value performs.

     • Especially helpful for retirement income planning.

  5. Death Benefit

     • If the annuitant passes away, beneficiaries typically receive the remaining account value, often avoiding probate.

  6. No Direct Market Investment

     • Your money is not actually invested in the index, so you avoid the direct risks of market volatility.

  7. Surrender Periods and Charges

     • FIAs usually have surrender periods (typically 5–10 years), during which early withdrawals may incur fees.

     • Withdrawals beyond the free amount (usually 10% annually) may also be subject to penalties and tax.

  ---

  Who Might Benefit from a Fixed Indexed Annuity?

  • Individuals nearing or entering retirement who want:

    • Protection from market downturns

    • A predictable retirement income stream

    • Tax-deferred growth

    • A conservative but growth-oriented savings vehicle

  
  
  

For additional information about annuities you can visit

• SEC Proposed Rule: Indexed Annuities and Certain Other Insurance Contracts
• Investor.gov - Annuities

(If you cannot access this information online, contact us to request a copy.)

* Annuity guarantees rely on the financial stability and claims paying ability of the issuing insurance company.