Investing in Fixed Equity Indexed Annuities

Fixed equity indexed annuities have become one of the latest  investing choices in the last fifteen years. Built as an investing vehicle that  can provide a greater return than a traditional fixed annuity, fixed equity  indexed annuities are often a smart investing choice for individuals looking  for income during their retirement periods.

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Similar to a traditional annuity, a fixed equity indexed  annuity requires that the investor deposit funds into the account for a  specific amount of time. Throughout this time, the profits accumulated will be  tax-deferred, allowing it to grow more and more each year. After the investment  period is over, the annuity is typically distributed as a monthly cash check or  the investor can decide to take the entire annuity out in one lump sum,  invoking the severe penalties like capital gains tax and fees from the  insurance company.

What makes the equity indexed annuity different from the  traditional annuity? The interest is handled differently in an equity indexed  annuity. The insurance company will buy an option from one of the stock markets  and after a year, it will either cash the option and have the interest put into  the annuity principal or it will let the option expire and not give any  interest into the account. Since the market fluctuates over the course of time,  the annuity can either gain or maintain its principal over time, although the  investment cannot lose value throughout time, despite market fluctuations.

Equity indexed annuities have been known to average returns  of 7% or better and when there are prosperous year, investors can enjoy large  gains of 10 – 20% or more. However, it’s important to note that the lean times  will affect the investment as well, similar to any investment vehicle for a  retiree.

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Purchasing an annuity is a big decision. Online research is a good start, but prudent investors should discuss all their options and risks with an independent financial advisor. Request a free, no-obligation consultation today, along with a report of current rates on brand-name annuities.

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For retirees looking for a way to protect their investment,  equity indexed annuities can be a great way to safeguard against a rising and  falling stock market. Although these annuities might not provide huge losses in  one year, they will also not suffer the extreme losses that a poor year in the  stock market can also hand any investor. For security and stability in the  retirement years, an equity indexed annuity can be a safe bet in the  treacherous world of retirement budgeting.

Learn more about how an equity indexed annuity can impact  your retirement planning. Do your research and compare the rates and quotes  from a variety of insurance companies to ensure you are getting the best return  for your investment.

To find the best annuity products request a free, comprehensive quote comparision. Secure your retirement today, Get Started Now.