When reviewing retirement options, people will ask,

"Are Fixed Indexed Annuities a Good Investment?"

First, it is important to note that this product (FIA) is not actually an investment. Instead, it is an insurance product that allows you to have potential gains.

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When reviewing retirement options, people will ask, “Are fixed indexed annuities a good investment?” First, it is important to note that this product (FIA) is not actually an investment. Instead, it is an insurance product that allows you to have potential gains. When you put your money in an FIA, you may get a reasonable rate of return. However, the rules behind it and the way it works are much different from your stock market accounts. Therefore, we can discuss what may make an FIA a good choice for you in retirement. And, why it may be an important part of your retirement strategy.

Your Unique Situation:

"Are Fixed Indexed Annuities a Good Investment for You?"

One of our main drivers here at Choules Financial is to educate pre-retirees and those in retirement. To that point, we offer many seminars at no cost to teach you all about retirement choices. For example, some people aren’t aware that a product like a fixed index annuity(FIA) can pay you a reasonable rate of return.* Also, these FIAs protect your principal, so you don’t have to worry about losing your money if the market takes a turn. However, for retirees who would rather have a higher risk, an FIA may not be what you choose. The best thing you can do is learn as much as you can. So, attend one of our educational events. Then, you’ll be able to find out the answer to, “Are fixed indexed annuities a good investment for me?”

are fixed index annuities a good investment

FIA and Reasonable Rate of Return

including possibly paying an interest rate on your money, and protecting your principal. You agree to place your money with the insurance company for a set time period, as well as other conditions. Essentially, there is a certain number of years in which your money grows. Then, you can take money from the annuity account, in the form of lifetime income (if you choose). All the while, your initial cash is safe from market losses.

are fixed index annuities a good investment utah

The Stock Market & FIAs

So, are fixed indexed annuities a good purchase? Keep in mind that FIAs don’t use the stock market to grow earnings for you. In fact, insurance companies use what is called an “index”, instead. The interest you earn on your annuity uses a calculation for a particular index, but your money is not directly in the market investments. Over the past 20 years or so, the FIA rate has averaged 4%-6% when the index is up. In addition, you can choose to have an annuity where you never lose your principal, no matter what. FIAs offer the chance to get a reasonable rate of return* and also protect your money.

An FIA Can offer

Lifetime Income

Comparing FIAs to other financial tools, you can see some key benefits. Firstly, an FIA gives you the chance to have a guaranteed** income for life. Unlike stock-based retirement accounts that can drop with big market changes, an FIA preserves your principal. Additionally, this stability gives you the opportunity to take income from it for the rest of your life. Retirees today are living into their 90’s, and even well past 100. If you’ve ever worried about running out of money in your lifetime, an annuity may be worth a look. Why? Because an FIA gives you a steady income flowing in that you can’t outlive. Also, you can choose from lots of options and additional benefits such as income riders, and others. With these benefits, you could receive a monthly or annual payment for as long as you live.

HAVE FUN WHILE YOU LEARN

Join us at for one of our complimentary gourmet meals and educational seminars.

What About Interest Rate?

How much you’ll receive in interest on your annuity depends on several items. Insurance companies offer many different products, each with its own options or benefits. Interest rates will vary based on which product, the insurance company, and optional benefits you select. At Choules Financial, we select only the most reputable insurance companies to work with. If an insurance company has a steady business model, a good reputation, and a good rating, those are indicators of a strong company that backs its products. In general, you should look for a reasonable rate of return.

Remember, the insurance company policy protects your money from market dips. Therefore, you may not see the same high-interest rates that are in the market. But, you have the opportunity for reasonable gains. And, you can lock-in the safety of your principal. It may be a trade-off, but it is a fair trade. You get to keep your money safe, potentially earn a lifetime income, and still have some potential upside.

Are fixed indexed annuities a good purchase? Find out for yourself. Just give our office a call. We’re here to help answer your questions and guide you to the right decision for you.

*Reasonable rate of return over time. 

**Backed by the claims-paying ability of the carrier. 

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