What’s An Annuity?
Annuities can provide a guaranteed lifetime income. In addition, fixed annuities and fixed index annuities also provide protection of your principal, regardless of market conditions. In this way, both of these annuity types could help you secure your retirement savings.
However, fixed index annuities (FIAs) offer additional advantages. First, FIAs are tax-deferred. Therefore, any potential indexed interest you earn is not taxable upon credit of the interest. Instead, you only pay taxes when you withdraw your money.
Also, an FIA can provide a reasonable rate of return, while securing your principal. Finally, FIAs may also have options for riders, such as income riders or long-term care riders. This additional flexibility allows you to plan for many aspects of retirement.
With an FIA, you may also be able to provide income to loved ones after you pass away. Some FIAs offer spousal benefits and optional death benefits as well.