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The Increasing Popularity of Fixed Indexed Annuities

Fixed indexed annuities were first introduced by the insurance industry in the mid-1990’s, and sales of these products have increased steadily ever since as consumers have become more aware of the benefits of these products.

Source: “Real World Index Annuity Returns,” published by the Wharton Financial Institutions Center, available here.

Why have fixed indexed annuities become so popular? It has everything to do with how you, as a consumer, are feeling and the choices you have to make with your money.

A fixed indexed annuity is merely an insurance product where you can store your money and have it grow at a guaranteed, fixed interest rate or at a potentially higher rate based upon a portion of the performance of an outside index, such as the S&P 500âindex. So, annuities can be an additional option, a complement to the places where you store your money, just like products offered by banks, securities brokerages, and mutual fund companies.

However, annuities offer features and benefits that many other financial vehicles do not offer. In the past, if you have chosen products that don’t contractually guarantee the safety of your principal, chances are you may have taken a pretty big hit to your value in recent years. That has caused a lot of people to look for a safer place to put their money today as well as plan for and position themselves to be better prepared for the next market correction.

Unfortunately, if you look to traditional guaranteed interest rate products, you may find unattractively low interest rates.

So what you want is a place where you know your money is safe, and by safe, that means you want it protected by contractual guarantees from market losses, not just a hope and a prayer. But you also want a place where you can receive a decent rate of interest over time. In addition, if retirement income planning is one of your primary goals, you want to know in advance what your minimum predictable stream of income will be.
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That’s exactly what you will find when you look at fixed indexed annuities. And that’s why sales of these annuities have been increasing year after year.

​If you want to move your money to a place where there is safety from market losses, plus the prospect of decent growth potential, and the assurance of a guaranteed income stream, a fixed indexed annuity is where you will find that combination of features and benefits. In a fixed indexed annuity, you will not lose any principal when the next market correction occurs.
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  • An Explanation of the Legal Reserve System
  • Annuities Appeal to the Middle Class
  • Understanding Annuity Liquidity Features
  • The Role of Annuities in Estate Planning
  • Why Fixed Indexed Annuities Have Caps
  • Study Finds Fixed Indexed Annuity Returns Attractive and Consistent
  • Understanding How Annuities are Treated Under the Tax Code
  • How a Fixed Indexed Annuity Works and Why Your Money is Safe
  • Where Annuities Fit in Your Financial Planning
  • Why Annuity Sales are Booming During the Recession
  • The Increasing Popularity of Fixed Indexed Annuities
  • The Reasons to Consider a Fixed Indexed Annuity
  • Why People Buy Immediate Annuities
  • Why People Buy Fixed Annuities
  • Retiring in the 21st Century: What It Takes
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​Bob Lindquist
Phone: 913.814.9600

bob@boblindquistkc.com
Safe Retirement Strategies
​
8900 Indian Creek Parkway
​Building 6 Suite 250

Overland Park, KS 66210

*Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation.

​Licensed Insurance Professional. Respond and learn how insurance and annuities can positively impact your retirement. This material has been provided by a licensed insurance professional for informational and educational purposes only and is not endorsed or affiliated with the Social Security Administration or any government agency. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
16045 - 2016/8/23 | Privacy Policy
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