In the simplest possible terms, a fixed index annuity is a tax-favored product that is offered by an insurance company. Instead of tying annual growth to an interest rate as is true with other investment opportunities, here your growth is measured against a stock market index (think: the Nasdaq, the New York Stock Exchange or the S&P 500).

Regardless of when your retirement date actually is, fixed index annuities bring with them a host of unique advantages that you cannot afford to ignore.

Fixed Index Annuities: What You Need to Know

Maybe the biggest benefit of fixed index annuities is also among the most immediate: they bring with them an income stream that is more-or-less guaranteed for the remainder of your life. FIAs by design are intended to bring with them a safe, steady income stream – meaning that you don’t have to worry about outliving your earnings potential, especially once your retirement date rolls around on the calendar.

At the same time, fixed index annuities are also a great opportunity to inject a little diversity into your existing portfolio. Remember that the point of your portfolio is essentially to help you manage both risk AND reward as you navigate the sometimes complicated waters of the financial markets. Because FIAs are designed for the long-term, they can be a great way to counter-balance some losses that you’re experiencing elsewhere, all without running the risk of losing the wealth they represent.

But especially these days, one of the most critical advantages of embracing fixed index annuities comes by way of the fact that the principal amount is as secure as they come. Even if the markets experience an incredible degree of volatility right before you retire, you’re still not going to lose value on an FIA. This is because your earnings aren’t actually exposed to market fluctuations at all. So even in the event of a worst-case scenario, you can NEVER lose your interest once it has already been credited to the principal value.

This, coupled with the general predictability of fixed index annuities, goes a long way towards explaining why so many have begun to embrace them with open arms.

If you’d like to learn more about the major benefits that come with owning fixed index annuities, or if you’d just like to explore additional investment opportunities with the help of a passionate professional, please don’t hesitate to contact Fortified Retirement today.


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