Indexed Annuity Retirement income, explained.
Index linked interest with limits you can understand before committing.
Indexed Annuity
A fixed indexed annuity uses a formula tied to an index to determine interest. Your money is not invested directly in stocks. Crediting floors protect against index declines but caps, participation rates or spreads limit what you earn. Fees and withdrawals can still reduce your contract value.
How this annuity works.
Is this for you?
Plain language answers.
No. A fixed indexed annuity uses an index to calculate interest. You do not own the index or its stocks and generally do not receive stock dividends.
No. It means the indexed interest credit will not be negative for that period. Rider fees, surrender charges, withdrawals and other adjustments can reduce your value.
Usually not. An income rider may track a separate benefit base used only to calculate payments. The cash surrender value is different and may be lower.
Annuities are long term insurance contracts. Guarantees depend on the issuing insurer's ability to pay claims. Fees, surrender charges and withdrawal limits may apply. Taxable withdrawals before age 59½ may face an additional 10% federal tax. An annuity inside an IRA or other account with tax deferral provides no additional tax deferral. Product availability varies by state and carrier. This is general education, not personalized tax or investment advice.
Other annuity options to compare.
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