A personal pension you cannot outlive.
A Fixed Indexed Annuity (FIA) is a contract with an insurance company. You move money in, usually from a 401(k), 403(b) or IRA, and the carrier guarantees you will not lose principal to a market decline. Interest is credited based on the movement of an index such as the S&P 500, and an optional income rider can turn the balance into guaranteed lifetime income.
Growth when the index rises. Zero when it falls. Never negative.
- Floor: in a year the index falls, you are credited 0%. Your balance and prior gains stay intact.
- Upside: in a year the index rises, you are credited a share of the gain, subject to a cap or participation rate set by the carrier.
- Tax deferral: no tax on interest until you take income, so gains compound on the full amount.
- Income rider: for an added cost, guarantees a lifetime income amount for you, or you and your spouse, even if the account balance is later exhausted.
Income for life
The rider is what turns an FIA from a savings vehicle into a pension. It sets a contractual monthly figure you can plan around instead of guessing at withdrawal rates.
How an income-for-life rider worksBuilt for the years when a loss cannot be recovered.
Five to ten years from retirement
The window when a market drop does the most permanent damage. An FIA protects the portion of savings that has to be there on day one.
Rolling over a 401(k), 403(b) or IRA
Qualified money moves into an FIA as a direct rollover with no tax event. Roth funds can also be used.
Wanting income you can plan around
An income rider replaces guessing at withdrawal rates with a contractual monthly figure.
We tell you the trade-offs first.
- Surrender periods typically run 5 to 10 years; withdrawals above the free amount inside that window carry a charge.
- Caps and participation rates are reset by the carrier each year and can change.
- Income riders carry an annual fee and reduce the accumulation value.
- An FIA is not a stock market investment and will not match a strong bull market year for year. It is designed to protect, not to maximize.
Every FIA we place is supported by a written suitability analysis. If a self-managed bond ladder or your existing plan serves you better, that is what we will say.
Find out what guaranteed income your savings could produce.
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