The Relevance of Index Annuities Today

Last week I wrote about the wild year we are having in terms of not only what we see on the news but also how that has been affecting retirement portfolios.  The title if you recall is “A Wild 2019 and How Annuities Fit.”  More than one person commented that I failed to tell everyone how annuities fit but there’s a reason I did that.

It’s mostly because how annuities fit is up to you.  Most of you don’t really need me to spell it out every single time but here it is once more.  Index annuities lock in gains once a year and never lose money when the market is down.  In times of low interest rates you also have the potential for yields you can’t get anywhere else and enough liquidity to draw income as needed or ladder out to other investments if you find a better opportunity.

I can tell you all about the key benefits of index annuities but I’ve done that before and I think most of you know that.  Everyone seems to want to limit market volatility and portfolio losses.  Whether you realize it or not, interest rate risk can be just as big a threat to your assets.  The answer is sitting right here in front of you and for one reason or another many people can’t put the pieces together.

The problem comes from polarizing opinions.  Frequently I hear people say, “this is certainly a unique approach.”  Yes, my recommendations are different and nothing like the mainstream.  In a meeting this week one gentleman said to me, “I had no idea annuities could be this flexible.”  That’s someone who gets it.

Why are index annuities relevant today?  It’s because they are the most flexible safe asset.  Protection, growth and opportunity.  Aside from traditional advice on annuities I’ve explained several alternate uses and proved how those strategies can be more profitable.  The point of it all is to show you reasons why you may want to use an annuity, not why you have to use an annuity.

This isn’t a fear-based approach.  I’m not going to scare you into thinking that you might run out of money or talk about the likelihood and cost of needing long-term care.  While those are viable concerns they come from a defensive mindset.  I want you to play offense and learn ways to grow your money safely so that those concerns are an afterthought.

More than one client has recently told me that they are not even watching the stock market.  Why worry about something that has no effect on you?  That’s in stark contrast to many I know that worry about it every day or those who want to make just a little more from a market that has been frothy at the top for two years.  It’s not as if you don’t make money with an annuity and I have several indices that prove you can grow even in times when the broader market is having trouble.

Index annuities are relevant today because they provide a solution to the uncertainty in the economy.  Low interest rates and market volatility are the two major factors that affect retirement investing.  There’s one solution that will give you more certainty in both areas.  If you’re afraid to give it a shot then you just don’t have all the information yet.  Send me a note or comment below and I’ll send you some info that gets you started on the right path.

All my best,



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Written By

Bryan Anderson

6 thoughts on “The Relevance of Index Annuities Today

    1. James- I prefer the contracts from Midland National in many cases. It is an extremely stable company with a lower distribution cost structure than most companies. In addition the growth potential of several options they have is very aggressive. If you’d like more information feel free to give me a call.

  1. I have a FIA that I am about at the half way point into it.
    I have a decide in the the next week what allocation to take.
    options………S&P cap of 5.2 and the fixed is 3.0 monthly is 1.9

    What do you suggest the allocation should be?

    1. Hi Ray – I don’t like to offer advice on contract sold by other agents since I have no access to the contract itself. Your best option is to refer to the agent who sold it to you for advice on allocations going forward.

    1. Sam,

      I responded to you in a private email but for the sake of anyone else who wants this information I’ll repeat it here. Currently, five year fixed annuity rates will range from 3.2% to 4.1% depending on how much liquidity you want. Company credit rating is also a factor for many of the higher paying contracts and there’s at least one available with a rate over 4% that offers simple rather than compound interest. As with anything you need to pay close attention to the details.

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