Financial Services
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Financial Services |
Fixed Indexed Annuities-What are they?
A fixed indexed annuity is a tax-deferred, long-term savings option that provides principal protection in a down market and opportunity for growth. It comes with far less risk and usually no fees, as opposed to a variable annuity. Returns are based on the performance of an underlying index, such as the S&P 500. While the benchmark index does follow the market, as an investor, your money is never directly exposed to the stock market.
Benefits of an FIA: Other than optional add-ons, there are typically no fees associated with an FIA.
Its tax-deferred status allows you to benefit from compounded growth.
You do not risk your original deposit if the stock market performs negatively.
You can pass assets to beneficiaries and avoid costly probate.
Optional riders, available for an additional cost, can enhance the amount your beneficiaries may receive.
A rider is often available to guarantee set monthly payments, regardless of how long you and your spouse live.
MYGAS-What are they?
A multi-year agreement annuity (MYGA), is a type of fixed annuity obtained through an insurance company. It is a strong alternative to a savings account or a CD with a bank. They have a guaranteed interest rate, usually lasting for 3 to 10 years. MYGAs best suit those close to retirement seeking tax deferral and investment return guarantees.
Benefits of a MYGA
A MYGA guarantees a fixed interest rate for a specified period of time, typically three to 10 years. The rates can often be better than those available with CDs.
MYGAs carry low risk because they are not tied to the stock market.
Taxes are deferred until you start making withdrawals.