Understanding the benefits of an index annuity can be a daunting task for investors, but it’s totally worth the effort to become proficient and give these a serious look.
Index Annuities are very safe investments much like a fixed annuity, yet they have the possibility for gains linked to a market index. And further, they can go up but not down due to the methods used to generate the market participation.
There are index annuities oriented towards appreciation, and there are index annuities geared towards the income rider. Most people are familiar with index annuities in conjunction with income riders- these are often known as Hybrid Annuities. But outside the guaranteed lifetime income rider component of Index Annuities lies the potential for a very safe appreciation vehicle.
The nice calculator below is wonderful for illustrating the power of annual reset – this is an index annuity crediting method that builds account value annually (subject to participation and caps). Use the start year to scroll through turbulent years and see how the annuity would perform.
This calculator comes from another online resource so we can’t vouch for the complete accuracy of the historical data sets. So please use this for a visual illustration and give us a call to select the best fixed index annuity with the highest crediting methods and most beneficial caps and participation.