Indexed Annuities: A Strategy to Turn Savings into Retirement Income

AMHERST, N.Y. - Feb. 18, 2021 - PRLog -- If you aren't eligible for a traditional pension, you might consider whether an annuity could play a role in your retirement income strategy.

Like all annuities, an indexed annuity (IA) is a contract with an insurance company that provides an income stream — either immediately or at some point in the future — in exchange for one or more premium payments.

Indexed annuities differ from other annuities in that they offer the potential to participate in market gains along with protection from downside risk. The performance of an indexed annuity is tied to a market index such as the S&P 500. When the index rises, so does the return on the annuity. But if the index tumbles, typically the worst the annuity can do is earn no interest — or a guaranteed minimum, if one is offered. The guaranteed minimum (typically an annual rate of 1% to 3%) is contingent on holding the indexed annuity until the end of the term.

Indexed annuities are complex products with rules, restrictions, and expenses, and they are not appropriate for everyone. It may be helpful to understand the following terms when you are considering your investment options.

Contact us for more information or if you want to review your portfolio and see if an annutiy will be a good fir for you.

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