A Fixed Indexed Annuity (FIA) is a fixed annuity that provides a guaranteed lifetime income and interest rate while preserving and protecting your premium. You do not pay taxes on your premium or interest until you take withdrawals or receive income. Unlike traditional fixed annuities, additional interest may be earned based on positive changes in commonly used financial indices such as the S&P 500 or the Dow Jones Industrial Average. Because the annuity you purchase is indexed, your premium and credited interest can never be lost due to an economic downturn.
As I like to point out, there isn’t a perfect investment tool. It is our belief that investors should be safer with their money as they grow older. Our average client is at or nearing the age of retirement and wants to preserve and protect their assets. If you want unlimited growth potential and are willing to assume the risk of unlimited loss, then a fixed indexed annuity is probably not the right choice for you. If you are concerned about protecting your principal and enjoying a reasonable rate of return on your investments, then we feel you should join our family.
Aren’t there other options with unlimited growth potential? Yes, there are; however, most of these options carry with them the corresponding potential for unlimited loss. We have never had a client lose one penny of their annuity product. Also, in addition to being free of management and administrative fees, fixed indexed annuities have the potential to earn more interest than traditional fixed annuities and other safe money alternatives.
Current advisors are not going to agree with our recommendations because, in doing so, they would have to admit that their recommendations were not appropriate. All financial firms have conservation units to try to conserve your business because, once the asset is transferred, the advisor and firm no longer generate any income from this asset. Most risk advisors cannot sell indexed annuities. These annuities are offered by insurance companies; therefore, they will not bring up these tools in client meetings.
Consumers have been told time and again that diversification is the key to safety. Although diversification may assist in reducing the risk of total loss, it is not a “foolproof” plan to safety. As Lisa Smith reports for msnbc’s TODAY Money, diversification doesn’t always work. Consumers are encouraged to appropriate at least a portion of their portfolio to annuities and other products that are not directly linked to the stock market.
Source: Plan carefully to make sure your 401(k) doesn’t flounder
By: Lisa Smith
There are many options available for withdrawing your money. The annuities we offer allow you to withdraw up to 10% after the first year – without penalty. In the event of premature death, your beneficiaries can choose to receive your annuity’s accumulated value as a monthly or lump sum payment.
FIAs are designed to provide an increased level of protection against prolonged market downturns. Although the rate of growth is limited, your principal and subsequent market gains are not at risk of loss due to bear markets or weak economic conditions. If the index upon which your annuity is based performs well, you will receive a percentage of that growth. Should the market take a nosedive, your principal and interest earned will not be lost.
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