Understanding the Benefits

Key Benefits of Fixed Indexed Annuities

A fixed indexed annuity, or FIA, is a contract between you and an insurance company. First, you agree to contribute a certain amount of money. Then, the insurance company agrees to pay you an interest rate on that money while keeping your principal protected. So, what are the possible benefits of fixed indexed annuities?

Understanding the benefits of fixed indexed annuities can help you make an informed decision about whether or not they are the right option for you. These products offer a number of benefits such as tax deferrals, indexed interest potential, and other options to protect you. With an FIA, your retirement income will be in a safer place.

Let's take a closer look at these benefits:
senior woman sitting at table counting money benefits of a fixed indexed annuity
Tax Deferral

Under current federal income tax law, the interest in your FIA accumulates tax-deferred. You don’t have to pay ordinary income tax on that money until you actually take it out of the FIA. An FIA differs from traditional savings accounts in this regard. Withdrawals are taxed as ordinary income. If taken prior to age 59½, a 10% federal additional tax may apply.

plant growing from money coins benefits of fixed indexed annuities
Indexed Interest Potential

FIAs provide an opportunity for interest growth. The money in the FIA increase based on the changes in an index or indexes. This, coupled with the way the interest accumulates tax-deferred, means you could accumulate interest faster. In addition to potential indexed interest, FIAs can also offer you the option to receive fixed interest.

smiling senior couple benefits of fixed indexed annuities
Protection Benefits

The safety and security that they offer are one of the biggest benefits of fixed indexed annuities. AN FIA keeps your principal and credited interest protected. Furthermore, you have to potential to receive guaranteed* income for life. And, lastly, if you pass away before annuity payments begin, an FIA may provide for your loved ones.

It's important to note:

As we mentioned earlier, an FIA gains interest based on an index. This is based on the performance of the stock market. However, in the event of a stock market crash, your assets remain protected, as part of the contract.

Want to learn more about the benefits of fixed indexed annuities?

Reach Out To Us.

Set up a no-obligation meeting so we can help you determine if an FIA is the right option for you.

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