An Equity Indexed Annuity Can Enhance Your 401k and IRA

When it comes to saving for retirement, nothing beats 401k retirement accounts and IRAs, Roth and Traditional. The result of diligently contributing to these kinds of retirement accounts is that you can count on having a significant nest egg once you reach retirement. But what happens if you’ve maxed out your contributions for the year? Do you have any other safe savings options? Sure, there are savings accounts or certificates of deposit, but these typically offer minimal interest rates. If you have a lump sum that you’d like to put to work earning a better interest rate, an equity-indexed annuity might work for you.

An equity indexed annuity, also called a fixed indexed annuity, is not an investment product. Your premium deposit is used to create a contract between you and an insurance company. With an equity-indexed annuity, you get the opportunity to enjoy the growth of a stock market index, such as the S&P 500, without the risk of losing any of your money in a Market downturn. A guaranteed minimum interest rate is paid on your equity-indexed annuity, and you earn interest up to a certain percentage, which is known as a cap. These interest earnings and the original principal are guaranteed by the issuing insurance company. Retirees and those nearing retirement are interested in protecting their money - while it may seem more attractive to shoot for the highest returns you can achieve by investing directly in the stock market, the safety that an equity-indexed annuity offers is hard to beat. An equity indexed annuity gives buyers both stability and potentially impressive returns—qualities that are attractive to those saving for, or close to retirement.

Equity indexed annuities are also tax-deferred. With many types of investments, you are responsible for paying income tax on the gains yearly. You do not, however, pay taxes on interest earnings from an equity-indexed annuity until you withdraw money from the annuity.

An equity-indexed annuity can be a great savings tool for anyone looking to lock-in favorable returns with little or no risk. An equity-indexed annuity is a safe place for your money, one that earns notable interest and maximizes your savings for the future, retirement or otherwise.

Our Annuity Specialists can help you chose the equity indexed annuity product that fits your needs. Please call our licensed Specialists at 1-877-519-8599 to start learning more about equity indexed annuities.