Fixed Index Annuities have a rate of return that may be linked to an external market index (like the S&P 500), but still may offer a minimum rate of return and no loss of principal or interest credits if the market index declines. The investment grows tax-deferred, which means you will not have to pay taxes on the interest until you withdraw money from the annuity. However, withdrawals from a fixed annuity before the age of 59 ½ may be subject to a 10% federal tax penalty.
Benefits of a Fixed Index Annuity
Principal Protection — Your money is not at risk due to market losses.
Tax-deferred income growth — Your investment will grow tax-deferred until you take a withdrawal.
Liquidity — Fixed indexed annuities provide some liquidity, typically 10% of the contract’s accumulated value is available penalty free on an annual basis if you are over 59 ½ and some fixed indexed annuities allow you to withdraw the interest on an annual basis.
Flexibility — Common surrender periods of anywhere between 5-10 Years. At the end of the Surrender Period withdrawals greater than the remaining free withdrawal amount will no longer be subject to Surrender Charges.
Death Benefit — Should you, as the Owner, pass away before your surrender period, the full value of the annuity will be payable to your beneficiary or beneficiaries.
Growth opportunities — If the external market index rises, your returns rise. May include a guaranteed minimum rate of return. No loss of principal due to market volatility. A fixed index annuity rate of return is based on the external index (i.e. S&P 500 Index).
Receive guaranteed income — Annuities are designed to provide reliable income during retirement, either for a set period or for as long as you live. Fixed index annuities can provide a fixed amount of monthly or annual income and some annuity companies offer the potential to receive increasing income for retirement.
Schedule a Meeting to Learn More About Fixed Index Annuities
If you are looking to create income for your retirement years, contact Safe Harbor to learn more. We offer a complimentary consultation to review your existing retirement plans and can provide an investment strategy that will provide the money you need to live comfortably in your golden years. Contact our office or give us a call at (614) 760-0670 to schedule your initial consultation.
Annuities are designed to be long-term investments and frequently involve charges such as income and death benefit rider fees and surrender charges. Early withdrawals may impact annuity cash values and death benefits. Taxes are payable upon withdrawal of funds. An additional 10% IRS penalty may apply to withdrawals prior to age 59 1/2. Annuities are not guaranteed by FDIC or any other governmental agency and are not deposits or other obligations of or guaranteed or endorsed by any bank or savings association.