Interest Crediting In A Fixed Indexed Annuity
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What are Annuities?
Annuities are long-term retirement solutions that provide income for life similar to that of a pension. An annuity is can come in various types: Fixed, Fixed Indexed, and Variable. Fixed Annuity Similar to that of a CD in that it provides a guaranteed rate of return over the life of the contract. The downside to a Fixed Annuity is that the rate of inflation may outpace your returns. The upside is that you can predict with certainty how much money you will have in the future with no loss of principle because of the market. Variable Annuity Provides growth based on the market and the sub-accounts associated with that particular Insurance Company. You have the benefit of market gains but also the potential loss, similar to other investments such as your 401k or mutual funds. Fixed Indexed Annuity Lastly, this annuity is a hybrid of the previous two. Similar to a Fixed Indexed Annuity you have a set rate of return on your principle. There is also the potential for market gains based on the indexed accounts, but you can never lose principle because the Index goes down. Most Fixed Indexed Annuities following the S & P 500 amongst others. Can I roll an old 401k or IRA into an annuity? Yes Annuities can be used along with IRA’s, 401k’s, 403b’s and numerous other retirement accounts or simple cash investments. | ||
