With today’s retirees living longer, more active lives, making sure you have adequate income for a lengthy retirement can be more important than ever. A fixed indexed annuity (FIA) may help you map out a sound income plan for the years ahead.
FIAs may be ideal if you’re looking to:
- Create a guaranteed “retirement paycheck”
- Pursue growth potential with protection from market loss
- Help reduce the effects of low interest rates and inflation on savings
- Provide income for a surviving spouse
- Help cover unforeseen expenses in retirement
- Create a legacy for your loved ones
Who can benefit from a FIA?
How do fixed indexed annuities work?
FIAs earn interest based in part on any upward movement in one or more reference stock market indices, such as the S&P 500®. If the net change in the index over a given crediting period is negative, you would earn zero interest credits for that period, but never less than zero.
In order to provide that valuable protection, indexed interest credits are calculated using a formula that may include:
- A cap (an upper limit on return)
- Participation rate (the percentage of an index’s return credited to the annuity)
- A percentage-based fee such as a spread
Important FIA facts:
- Money in annuities grows tax-deferred
- FIAs can offer higher potential interest credits than fixed rate alternatives
- Any interest you earn is locked in and can’t be lost to future market downturns
- Optional riders ca n offer guaranteed income, a death benefit or liquidity options
Is a fixed indexed annuity right for me?
FIAs are designed to help meet a variety of needs and can be a valuable addition to your retirement plan to help you feel more confident about your financial future and be better prepared for life’s uncertainties.
“Planning for a secure retirement requires a personalized approach, so it is important for financial professionals and their clients to consider savings vehicles that can provide growth and protection for both present and future financial needs,” says Mike Downing, Chief Operating Officer for Athene.
Explore if a FIA is right for your risk tolerance, goals and the lifestyle you hope to enjoy in retirement by speaking with your financial professional. Since the key to a confident retirement is preparation, there’s no better time than the present to start planning.
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Although fixed indexed annuities offer principal protection from market downturns, the deduction of applicable charges could exceed any interest credited, resulting in the loss of principal.
Withdrawals and surrender of taxable amounts are subject to ordinary income tax, and except under certain circumstances, will be subject to an IRS penalty if taken prior to age 59½.
Under current tax law, the Internal Revenue Code already provides tax deferral to qualified money, so there is no additional tax benefit obtained by funding a qualified contract, such as an IRA, with an annuity; consider the other benefits provided by an annuity, such as lifetime income and a Death Benefit.
Any information regarding taxation contained herein is based on our understanding of current tax law, which is subject to change and differing interpretations. This information should not be relied on as tax, legal or financial advice and cannot be used by any taxpayer for the purposes of avoiding penalties under the Internal Revenue Code. We recommend that taxpayers consult with their professional tax and legal advisors for applicability to their personal circumstances.
Guarantees provided by annuities are subject to the financial strength and claims paying ability of the issuing insurance company.
Indexed annuities are not stock market investments and do not directly participate in any stock or equity investments. Market indices may not include dividends paid on the underlying stocks, and therefore may not reflect the total return of the underlying stocks; neither an index nor any market-indexed annuity is comparable to a direct investment in the equity markets.
The S&P 500® Index (the “Index”) is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”) and has been licensed for use by Athene Annuity and Life Company (“Athene”). S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx® and CDX® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). Athene’s products are not sponsored, endorsed, sold or promoted by S&P DJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the Index.