Weekend Reading: How to Find Fixed Indexed Annuities That Work for You

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend reading how to find fixed indexed annuities that work for you Weekend reading how to find fixed indexed annuities that work for you
Weekend Reading

You’re in the midst of a unique retirement planning environment. Many retirees can no longer rely solely on pensions and Social Security for lifelong income, and as a result, annuities (specifically fixed indexed annuities – FIAs), have gained popularity.


How they work: FIAs offer principal protection from market losses and the potential for growth through index funds. Some FIAs combine indexes, providing exposure to different asset classes, while others mirror a specific index like the S&P 500. Participation rates determine the portion of earnings you retain, and even with a participation rate below 100 percent, FIAs still offer benefits by avoiding downside risk.

Analyzing your options: When searching for a good FIA fit for you, consider the duration, participation rates and cap rates offered by insurance companies. Further, while reviewing illustrations provided by insurance companies, pay attention to the worst-case scenarios and the performance of annuities during the past two decades. Comparing annuity potential based on the worst 10-year run can provide a more realistic perspective.

If you’ve turned away from annuities in the past, it might be time to re-evaluate. You’re living longer, and adding an annuity to your retirement income plan could help bring the financial peace of mind you’re searching for.