Fixed Indexed Annuities | Up North Retirement

Fixed Indexed Annuities does a bit of everything. It can provide a fixed rate of return and also provide growth based on index performance. If someone is in need of guaranteed income or payouts based on Long Term Care, it can cover those needs as well, and more. These types of annuities can be funded with qualified and on-qualified funds.

These annuities allow the owner to purchase stock options on a particular index that are usually one year. These options allow the account to participate in the gains of the options, but none of the loses. This is because the annuity company is insuring the account against loss.

Performance in an Indexed Annuity is subject to the Index itself. If the Index has a gain, you will participate in the gain by a percentage. This is known as a Participation Rate (PAR Rate), and Indexed Annuities offer many different PAR rates ranging from 50% to over 200%. These rates can change, so it is important to pick the right company.

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There are some fees associated with owning an indexed annuity. In most cases, this will be assigned as a percentage fee that is subtracted from the gain in the index that your annuity is linked to. In most cases, our advisors stay away from Fixed Indexed Annuities that have fees within the account.

There are some limitations that put an upper limit on the amount of returns you can receive on your annuity in a given period. For example, if the index your annuity is linked to has a 10% return, but your plan has a 3% cap, your account will only receive a maximum of 3%. Our trained advisors stay away from capped investment strategies.

Riders are extra features that can be added to Annuities. A popular rider that is added to indexed annuities is the minimum lifetime guaranteed income rider. You can receive payments for life, regardless of your annuity account value.

Who Needs Fixed Indexed Annuities?

To get the best idea of whether an indexed annuity is fitting for your situation, you should speak to one of our trained advisors to discuss your situation. This will help you determine if an indexed annuity fits into your retirement strategy.