How Fixed-Indexed Annuities Perform in Different Market Conditions
There are many financial products to consider when building your retirement income strategy. Equity-based products, such as stocks and mutual funds, can help you maximize earnings when the market is up, but carry a greater risk of loss when the market is down.
A fixed-indexed annuity protects your retirement savings from loss while providing the opportunity to earn interest that is tied to the performance of a well-known index, such as the S&P 500®.
The following scenarios help you understand how an equity-based product would perform in different market conditions over time compared to a fixed-indexed annuity.
Over time, when market
A fixed-indexed annuity (FIA) may...
|Up||Gain||Gain||An equity investment and FIA both grow when markets rise. Interest earned by an FIA is subject to limitations.|
|Up then Down
Down then UP
|Break Even||Gain||When markets rise or fall and then return to original levels, an equity investment will break even, while an FIA may lock in interest during the rise and protect from loss during the fall.|
|Down||Lose||Break Even||An equity investment loses value when markets fall, while an FIA protects from loss and breaks even.|
|Volatile||Unknown||Gain||The value of an equity investment can fluctuate during volatile market conditions while an FIA may lock in interest and protect from loss.|
Incorporating a fixed-indexed annuity into your retirement portfolio can help protect your savings from market loss while providing the opportunity to benefit from market gains. Talk with your insurance professional to see if a fixed-indexed annuity is right for you.