FIAs are unique risk management vehicles that combine the growth potential of index-linked interest, the protection from market downturns and the guarantees of lifetime income. These valuable benefits help protect people from the key retirement risks of inflation, longevity and market volatility.
An annuity is a type of investment product that can provide you with a stream of income in retirement. Essentially, you make a lump sum payment to an insurance company, and in return, they promise to pay you a set amount of money each month, quarter, or year for a specified period of time, or for the rest of your life.
There are several different types of annuities available, each with its own unique features and benefits. The FIA is as follows.
A fixed indexed annuity (FIA) is a type of annuity that offers both guaranteed principal protection and the potential for higher returns based on the performance of an underlying stock market index, such as the AI powered, S&P 500, NASDAQ . With a fixed indexed annuity, your principal is protected from market risk, but you have the opportunity to earn interest based on the performance of the index.
Here's how a fixed indexed annuity works:
You make a lump sum payment to an insurance company that offers fixed indexed annuities. The popular one is 401 (k) rollovers after change of job.
The insurance company then credits your account with a guaranteed interest rate, which is typically lower than the potential interest rate you could earn with a variable annuity.
The insurance company also credits your account with interest based on the performance of an underlying stock market index, such as the S&P 500. If the index performs well, you could earn a higher interest rate, up to a predetermined cap or participation rate.
Your principal is protected from market risk, which means that even if the index performs poorly, you won't lose any of your initial investment.
At the end of the contract term, you can choose to receive regular payments for a specified period of time, or for the rest of your life.
If you're considering a fixed indexed annuity as part of your retirement planning, it's important to consult with a financial professional who can help you understand the pros and cons of different annuity options and determine whether a fixed indexed annuity is the right choice for you.
Why choose Nirvana Financial Group?
We care our client's so we work towards goal of protecting client's hard earned money from down market and always cash on the gains.
Email us to book a free consultation at info@nirvanafinancialgroup.com
