6 fixed indexed annuity myths busted!
Understanding common misconceptions can help you determine if a fixed indexed annuity is right for you.
Many of us have some level of investment in the market 鈥� with many working-age adults choosing to help save for the future. But when we experience market volatility, it may lead you to rethink how much risk you鈥檙e willing to take with your nest egg, especially if you鈥檙e in or nearing retirement.
It鈥檚 one thing to answer hypotheticals about saving and losing money when you鈥檙e planning for the future. But watching your 401(k) balance drop in market downturns sheds light on the real鈥憌orld implications. If experiencing market volatility has diminished your appetite for risk, now might be the right time to reassess your retirement savings plan.
What might your risk tolerance look like now? Take this quick quiz to help you gain a better understanding of what your risk tolerance and your expectations may be for the retirement products and solutions you choose.
Reducing your exposure to volatile markets and locking in some income guarantees may help you feel more confident about staying on track for the longterm. Two strategies worth considering include:
Annuities are designed to help you achieve your retirement savings goals and provide future income. By helping insulate you from major financial risks like stock market losses or outliving your money, they could be part of a solution that helps you stay in your financial comfort zone. In this chart, you鈥檒l see how different kinds of annuities are mapped along a risk spectrum. The left side of the spectrum is the most conservative. Anyone with the highest tolerance for risk may feel comfortable at the far right.
Diving deeper into annuity options
While all annuities are designed to provide income for retirement, there are different kinds to align with your accumulation goals and how much risk you鈥檙e comfortable taking.
Economic repercussions have led many people to rethink their appetite for risk and whether their financial strategy still meets their goals. This may be the time to talk with a financial professional about ways to help keep your retirement savings better protected, especially in the event of future downturns.
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Guarantees provided by annuities are subject to the financial strength of the issuing insurance company. Guaranteed lifetime income is available through annuitization or the purchase of an optional income rider for a charge.
Fixed indexed and registered index-linked annuities are not stock market investments and do not directly participate in any stock or equity investments. Market indices may not include dividends paid on the underlying stocks, and therefore may not reflect the total return of the underlying stocks; neither an index nor any market-indexed annuity is comparable to a direct investment in the equity markets.
Understanding basic economic trends can help you make more confident financial decisions. Here鈥檚 what you should know about the market and creating a sound retirement plan.
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