What is a registered index-linked annuity and how does it work?


As you near retirement, protecting your money from losses due to stock market downturns may become a priority. But for some investors, the cost of that protection may not be worth the benefit. If you are in this situation, you may want to ask your financial professional about a registered index-linked annuity (RILA).

Choosing an annuity that’s appropriate for your situation depends in part on your tolerance for risk. Generally speaking, the more risk you’re willing to accept, the higher your potential return. From a risk standpoint, a RILA can be described as a cross between a fixed indexed annuity and a variable annuity. A RILA may be a good match for you if you want to limit your downside exposure, but are willing to accept some market risk in exchange for more growth potential. It’s important to know your annuity “comfort zone” when it comes to your tolerance for risk.

A closer look
Like fixed indexed annuities, RILAs provide the opportunity for growth based in part on the performance of a stock market index. Other similarities include tax-deferred growth potential, annual free withdrawal amounts, and an option to convert the annuity into a stream of income payments in retirement. Neither a RILA nor a fixed indexed annuity are stock market investments and neither directly participate in any stock or equity investments.

However, RILAs differ from fixed indexed annuities in that you accept a level of risk of market loss in exchange for higher upside potential.

How it works
The upside and downside limits of RILAs are connected, so a higher level of protection from downside risk means a lower cap on upside potential, and vice versa. When index performance is positive during a term, your annuity may earn interest credits, limited by a cap or participation rate. Index declines can result in negative interest credits, with a level of protection from any loss.

Downside protection
A "buffer" and a "floor" are two options that limit exposure to market loss.

  • Buffer: Percentage of downside protection, typically 10, 20 or 30 percent. For example, if an index declines 15 percent and you choose a 10 percent buffer, you would incur a loss of 5 percent.
  • Floor: Opposite of the buffer option. In this case, you would be exposed to the percentage loss up to the floor amount, but you are protected against any loss after this percentage. For example, if you choose a product with a 10 percent “floor” and the market declines 15 percent, you would lose 10 percent, because the floor limits the downside.

Meeting the need for accumulation
Registered index-linked annuities are typically designed to help you accumulate money for retirement or other long-term needs. If you are searching for an option that provides lifetime income, another annuity solution may be a better fit. A RILA may be appropriate if you are currently retired or are planning to stop working in five to seven years. You might consider a RILA if you’re looking to supplement your retirement plan and would like to choose from a variety of protection and growth options to create a strategy that aligns with your individual retirement needs.

Discover your “comfort zone” for risk
How much risk are you willing to take to grow your retirement nest egg? Athene Annuity and Life Company believes the right blend of risk and return potential can increase your confidence in your retirement plan and help you stay in your financial comfort zone. Find your comfort zone in the annuity spectrum. 

This information is brought to you by Athene — where unconventional thinking brings innovative annuity solutions to help make your retirement dreams a reality.


Registered index-linked annuities have a risk of substantial loss of principal and related earnings. They are designed to be a long-term investment product used to help provide income for retirement and are not suitable as a short-term investment.

Registered index-linked 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.

This material is a general description intended for general public use and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Clients should consult their own tax, legal and accounting financial professionals before engaging in any transaction.

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Annuities contain features, exclusions, limitations and availability that may vary by state and/or sales distributor. For a full explanation of an annuity, please refer to the Certificate of Disclosure or Prospectus (as applicable) and contact your financial professional or the company for costs and complete details. This material is a general description intended for general public use. 

Annuity contracts and group annuity contracts are issued by Athene Annuity and Life Company (61689), West Des Moines, IA, and Athene Annuity & Life Assurance Company (61492), Wilmington, Delaware, in all states (except New York), and in D.C. and PR. Annuity contracts and group annuity contracts are issued by Athene Annuity & Life Assurance Company of New York (68039), Pearl River, NY, in New York state. Payment obligations and guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Insurance products may not be available in all states. These companies are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read as investment advice. This material should not be interpreted as a recommendation by Athene Annuity and Life Company, Athene Annuity & Life Assurance Company, Athene Annuity & Life Assurance Company of New York, or Athene Securities, LLC. Please reach out to your financial professional if you have any questions about insurance products and their features.

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