Should I Buy A Fixed Index Annuity

If you've ever wondered if you should buy a fixed index annuity, it is probably because a financial advisor has recommended one to you.

Well, it may be a good decision to buy one, but on the other hand it may not be in your best interest.

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First, you need to know what is a fixed index annuity.

It is "Fixed," meaning it is not variable, so you are not subject to market risk in one.

Your interest is earned based on what an "Index" does, such as the S&P 500.

And it is an "Annuity" which means it is a contract between you and an insurance company. Whatever guarantees the insurance company puts into the annuity contract, it must honor.

How Does A Fixed Index Annuity Work?

When you purchase a fixed index annuity you can choose some options to allocate your money across. These are the types of index crediting methods.

If the index you are tracking does well, then you have the potential to earn interest inside your annuity.

In a sense you are participating in a limited portion of the stock market's gains. And let me stress "limited." You will not have the potential to earn as much as you could if you directly invested in the equity markets.

Who Should Buy A Fixed Index Annuity?

Fixed index annuities do some things very well. Astronomical growth is not one of them. So if you are looking for that, don't buy a fixed index annuity. It's not for you. And don't believe ANY advisor that says you will see incredible growth out of a fixed index annuity.

However, they are good for 4 things:

1. For conservative growth of funds where the most important thing is principal protection. Your money is not invested in the stock market. So if it goes down you will not lose money in a fixed index annuity.

2. They are good for guaranteed retirement income. Fixed index annuities often include income riders. These will guarantee you a specific amount of income that you can never outlive. If you like this type of guarantee when it comes to retirement income planning, then a fixed index annuity may help you out.

3. Some fixed index annuities provide limited long-term care benefits. They usually do this through the income rider that I mentioned above.

4. They can help you enhance the legacy you leave to your heirs. This is a good option for people that can't qualify health-wise for a better legacy maximizing strategy like using life insurance.

Need some help determining if you should buy a fixed index annuity? You can ask me your questions by claiming a spot on my calendar for a 20 minute phone conversation.

You can do so by visiting:

I'll help answer your questions and point you in the right direction.

To download your FREE ebook "How To Avoid Annuity Traps" visit

Disclosures:
Investment Advisory Services offered through Retirement Wealth Advisors Inc. (RWA) a Registered Investment Advisor. Retirement Planning Made Easy / Tri-State Financial Group and RWA are not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Retirement Planning Made Easy / Tri-State Financial Group and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.

Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors Inc.

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