Learn The Basics: Fixed Index Annuities

Learn how fixed index annuities work and provide the following benefits… safety, a reasonable rate of return, accumulation, and income you cannot outlive regardless of age.

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Retirement income and maintenance shouldn’t be something that keeps you up at night. But for many, the choices for accumulation of assets have been limited to the potential for large growth in a volatile stock market OR the paltry interest rates earned on CDs, money market funds, or low yield government bonds.

But now, with a fixed index annuity, you have a financial vehicle that offers interest credits linked to various stock market indices that provide the potential for upside growth, with none of the downside risk.

That’s right, when the market goes up, you earn a reasonable rate of return. When the market goes down, you don’t lose a penny. Your principle and all previous gains are locked in, protected, and guaranteed.

But portfolio accumulation is only part of the story. Most Americans fear outliving their retirement income account. You have probably heard the “4% rule.” Basically, it states that you should be able to take 4% out of your portfolio every year and have a 90% chance of not running out of money. That doesn’t give much comfort to retirees in a volatile market. With a fixed index annuity, you are guaranteed that your income payout will never end … regardless of how long you live.

The fixed index annuity’s lifetime income account guarantees that you can withdraw, depending upon your age, 4%, 5%, 5 & 1/2%, 6% or more and never run out of income. And if your account value is growing, there is also the opportunity of having your income payout increase. That is a guarantee!

Let’s take a look at how a fixed index annuity might just be the retirement planning and income tool that would work for you.

A fixed index annuity has 2 separate accounts: the Accumulation account, and the Income account.

Let’s refer to the Accumulation account value as your “walk away money.” This is your initial premium plus all interest credit that you have earned via a linkage to index credits. Many people are just looking for an accumulation vehicle that is tax deferred. A fixed index annuity does that in spades!

Let’s look at the other account … the Income account. The optional rider is for people who are looking for another “defined benefit” type of account – another income stream to add to their social security and pension type payments. Here is how it works:

Some fixed index annuities apply a bonus to your premium in the Income account. It also guarantees that your Income account will grow at a very competitive compound interest rate, guaranteed. PLUS, some fixed index annuities credit all index interest gains in the “account value” to your income account balance.

Is it possible that the income payment to you from the Income account could increase? The answer is “yes!” If interest credits are growing, when added to your Income account, the income base could increase. If that is the case, your income payment could increase. But, remember, the payout can never decrease … no matter how long you live!

Many people don’t want to be locked into the income payout. There might be years when they don’t need money. That is another example of the fixed index annuity’s flexibility. You can stop and start whenever you like.

Now, what about the indices that link to your fixed index annuity account value? They are household names that Americans have turned to for years.

Lifetime income and protection against loss of principal and previous gains. Protection against markets.

Seems like with a fixed index annuity, you can have your cake and eat it, too.

Visit for more information or give us a call at 1-877-844-0900 if you have any questions.

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

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.


Finance: How to calculate Annuity, Present Value, Future Value

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Annuities : Annuity Due , Finding Future Value

Thanks to all of you who support me on Patreon. You da real mvps! $1 per month helps!! 🙂 !! Annuities : Annuity Due , Finding Future Value. In this video, we invest a fixed amount at regular intervals in an annuity due. We then find the future value of the annuity.

How to create guaranteed retirement income through annuities

Creating sustainable retirement income is real challenge, and it's in times like these – where historically low interest rates have squeezed out potential returns for bonds and term deposits – that annuities can play a role.

In this video, Wealth Protection Specialist Andre Guillemette outlines how annuities can turn retirement savings into guaranteed income.

Learn more at

Buyer’s Guide: Annuities

How to Choose an Annuity and Retirement Advisor That’s Best for You!

Will I run out of money before I die?  Email here today
What we want to impress upon you is that most bias is not necessarily bad; however, by knowing the type of advisor you are working with you can more readily pin point their potential bias as acceptable or unacceptable, being wary if necessary. Within the industry we have two primary types of advisors – 1) commission driven insurance agents and securities brokers – working under a sales oriented Suitability Legal Standard, 2) fee-only advisors and fee-based advisors – working under a best interest of the client Fiduciary Legal Standard. Each advisor type has its share of good and unfortunately some bad advisors. Read more…

Disclosure: Videos are educational and conceptual only and not a solicitation. They are not to be considered investment, insurance, tax or legal advice. It is recommended that you work with licensed professionals for individualized advice before making any important financial decisions. Annuities are not FDIC insured and their guarantees are based on the claims paying ability of the issuing insurance company. State Guarantee Associations, while offering specific protections, are not the same as FDIC insurance. Read more Annuity Guys disclosure at:

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Annuity Calculation in 9 Minutes – Annuities Explained for Present Value of an Annuity Formula

Clicked here and OMG wow! I’m SHOCKED how easy.. No wonder others goin crazy sharing this??? Share it with your other friends too!

Exactly What may be the Present Value of an Annuity Formula and What are Annuities?

In the event that you currently recognize the very idea of Perpetuities, the concept of Annuities is incredibly easy. It is extremely similar to Perpetuities, just that the payments are not forever. As opposed to forever, these types of payments come in just for a set period of time.

Let’s say I provided you a sheet of paper or even certificate, and it promised that I might pay you $10 each year for specifically 12 years, and then I would stop paying you instantly after that. Is this still a “perpetuity”? It even now consists of standard payments of equivalent quantities, much like a perpetuity, but it is not necessarily forever; it has a limited time period. Therefore in this case, it’s not referred to as a perpetuity, but an “annuity”.

Now, just like within the case of a perpetuity, an important question now is… precisely how much are you prepared to pay me for that sheet of paper? Simply how much are you willing to pay for this kind of “annuity”?

For this, you would make use of the Present Value of an Annuity Formula. For general managers, there is no need to know the actual step-by-step process upon calculating this, as it could easily end up being done by accountants or by totally free calculators on the web in addition to smartphone apps. Nevertheless, if you need to learn the process yourself, you may watch a great deal of free online tutorial video clips from numerous websites as well as Youtube.

Real-Life Application

Let’s imagine you are offered to invest your own severance pay (or retirement pay, or similar large sum) of $10,000 with a pension company or even investment company, and they promise to pay you $600/year for thirty years. A regular individual may think it is a good deal because $600/year x 3 decades = $18,000, which is much more than the first $10,000 investment.

However, utilizing the Present Value of an Annuity Formula, you will recognize that the “fair value” of this particular annuity is in fact only $9,223 in the event that rates of interest are generally at 5%… and that you therefore are “overpaying” if you pay anything at all more than $9,223. Put simply, if you pay anything more than $9,223, then you are just as good and even far better off placing your hard earned money in the bank as an alternative, and earning interest from the bank (or any other “risk-free” investment). At $9,223, the rate of return of your investment/pension is going to be precisely equal to the rate of return of putting your money within the bank. If you shell out greater than $9,223 for your investment, then your current investment’s rate of return may end up being less than the return from the bank.