Balancing Growth & Security
Indexed Annuities
Indexed annuities represent a unique fusion of growth potential and financial security in the annuity market. These innovative financial products offer the opportunity to benefit from market upswings while providing a safety net against market downturns. At PWYB, we recognize the value of indexed annuities as a powerful tool for building a resilient retirement strategy.
How Indexed Annuities Work
Principal Protection
Opportunity for higher returns compared to traditional fixed annuities
Market Link
Your initial investment is guaranteed, safeguarding your financial foundation.
Crediting Methods
Gains are calculated using various methods
- Annual Point-to-Point: Compares index value at the start and end of each contract year
- Monthly Sum: Aggregates monthly index changes
- High Water Mark: Uses the highest index value during the term
Participation Rates and Caps
These determine your share of index gains. For example, a 70% participation rate means you receive 70% of the index’s positive performance.
Floors
Protect against negative returns, typically guaranteeing 0% as the minimum credited rate.
Benefits of Indexed Annuities
Growth Potential
Opportunity for higher returns compared to traditional fixed annuities
Downside Protection
Your principal remains secure even in market downturns
Tax-Deferred Growth
Earnings grow tax-free until withdrawal
Guaranteed Minimum Interest Rate
Ensures a baseline return regardless of market performance
Optional Income Riders
Can provide guaranteed lifetime income
Ideal Candidates for Indexed Annuities
Indexed annuities can be particularly beneficial for:
- Pre-retirees looking to grow their nest egg with reduced risk
- Conservative investors seeking market participation without full exposure
- Individuals wanting to diversify their retirement income sources
- Those who value principal protection but desire potential for higher returns
Comparing Indexed Annuities to Other Options
vs. Fixed Annuities
Higher growth potential but less predictable returns
vs. Variable Annuities
Lower risk and fees, but potentially lower returns
vs. Direct Market Investment
Reduced risk and volatility, but limited upside
The PWYB Approach
At PWYB, we take a meticulous, client-centric approach to indexed annuities:
- Comprehensive Needs Analysis: We evaluate your financial situation, goals, and risk tolerance.
- Product Selection: We leverage our industry expertise to identify the most suitable indexed annuity options.
- Transparent Explanation: We ensure you fully understand the product’s features, benefits, and limitations.
- Ongoing Support: We provide regular reviews and adjustments as your needs evolve.
Frequently Asked Questions
It’s based on the performance of the linked market index, subject to participation rates and caps.
Your principal is protected. The worst-case scenario is typically a 0% return for a given period.
While often lower than variable annuities, fees can include surrender charges and rider costs. We ensure full transparency on all fees.
Terms typically range from 5 to 10 years, but can vary. We’ll help you choose a term that aligns with your financial timeline.
Most indexed annuities allow limited withdrawals. We’ll explain the specific liquidity options of any product we
Ready to explore how an indexed annuity can enhance your financial strategy?
Other Types of Annuities To Explore
Fixed Annuities
Predictable, guaranteed income with low risk. Ideal for those seeking stability in retirement.
Variable Annuities
Opportunity for greater growth through market participation, with some guaranteed benefits.
