Annuities
Understanding The Benefits
Benefits of Annuities For Retirement
Fewer employers are offering retirement options. You may be looking for a way to protect and increase your retirement savings. Fixed indexed annuities (FIAs) are a part of a broader strategy that can help you protect and build your retirement income.
Benefits of an FIA
Indexed Interest Potential
Your annuity is linked with an index. As a result, your annuity earns interest when the index is up. However, an FIA is not invested directly in the market. As a result, you aren't putting your money at risk in the event of a market downturn.
Tax Deferral
The earnings on an FIA accumulate tax-deferred. This means you won't have to pay taxes on interest earned on your annuity until you withdraw it. Additionally, withdrawals are taxed as ordinary income. By compounding interest, you can accumulate money faster. However, an additional 10% federal tax may apply if you withdraw money before you reach the age of 59½.
Income Protection
An FIA can provide you with a degree of protection that could make you more confident in your retirement strategy. Especially, this protection can be helpful to you in three specific ways:
FIAs are designed to accumulate funds to help protect your principal amount.
Annuities provide retirees with income throughout their lifetime, guaranteed by the insurance company that issues the annuity.
FIAs can provide your loved ones with a death benefit, if you pass away before you begin taking payments. Additionally, the death benefit may avoid probate.
FIAs and the Stock Market
FIAs are insurance products. However, they are not invested in the stock market.
The issuing insurance company uses what’s called an index. These products earn interest based on an external index. The interest rate stays the same, regardless of stock market fluctuations. Your FIA remains unaffected in the event of a stock market crash.
At Fraga Financial, we only work with trusted and reliable insurance providers. With the low-risk option of an FIA, you can receive a reasonable rate of return** while keeping your assets safe.
Annuity Options
Consider all your options when choosing annuities for retirement. You can make choices to ensure your strategy suits your needs. Our team can help you learn your options and make choices. Reach out to us.
