What is

The Best Annuity Plan for Retirement?

An annuity provides the option of fixed regular payments. In terms of retirement income, an annuity may be a good option for some people. So, what is the best annuity plan for retirement? First, let’s look at what an annuity is (and, is not). Fixed index annuities (FIA’s) are not invested in the stock market. Instead, an FIA is an insurance policy that may also give potential gains through an index. Because of this distinction, an FIA may be the best annuity plan for retirement for certain retirees.


Best Annuity plan for Retirement
Could An Annuity Be Right For You?

Here at Marathon Group Financial, we believe in long-term relationships with our clients. To that end, we focus on educating retirees about their retirement choices. For instance, some retirees do not know that an annuity, like an FIA, may offer a reasonable rate of return. In addition, FIA’s protect the initial money you put into it. So, if the market is down, your money will not drop as a result of the market. Essentially, FIA’s may serve an important purpose in your overall retirement plan: protection. But, it may be only a piece of the puzzle. To learn more about retirement options, we invite you to attend one of our seminars.

Potential Rate of Return

Potential rates of return are possible with an FIA. Basically, an FIA is a deal between you and an insurance company. Of course, there are certain terms and conditions of this agreement. One of these terms may include the possibility of earning an interest rate on your money. As the owner of the FIA, you put your money into this policy for a set period of time. During the growth period of your FIA, your money usually stays in the FIA account. However, after a certain number of years, you may have the option to take money out. Meanwhile, your initial money is still secure and your FIA shields it from market loss.

FIAs and The Market

FIAs offer some benefits over fixed annuities or variable annuities. First, and FIA does protect the money you put it in from loss. An insurance company issues you the annuity policy and, in return, they agree to keep your principal safe. Unlike a fixed annuity, however, FIAs also may have the potential for an increased interest rate. For example, when an FIA’s index is up, the FIA may see an increase in the interest rate. However, a fixed annuity’s rate remains the same, no matter what an index might be doing.

Also, a variable annuity does carry market risk. In fact, a variable annuity’s rate of return directly correlates with the stock market. Therefore, if the market goes down, you could lose your principal if you have a variable annuity. We help our clients to understand all their potential risks.

Best Annuity Plan for Retirement Income

First, with an FIA, it may be possible to generate an income for life. Stock-based retirement accounts, on the other hand, can not make this promise. Specifically, if the stock market goes down, the money in your retirement account may go down as well. There is no protection for the money you have in market investments.

Additionally, an FIA contract may provide income for the rest of your life. Today, more retirees are living past 100. Do you have a plan for your money to last?

More About Interest Rate

The interest you may get from your annuity depends on a few things. First, each annuity product has terms or benefits. Therefore, the interest rate may change based on the company or product type. In addition, if you select certain benefits with your FIA policy, that may impact your interest rate as well.

At Marathon Group Financial, we work with top-notch insurance and financial companies. Typically, these companies must have a strong business model in order to issue a quality FIA. Overall, we recommend you consider an FIA as a way to protect your money. Yet, you may also wish to choose an FIA with a reasonable rate of return.

Keep in mind, your money is protected by the insurance company if the stock market goes down. Because of this, you may not see the same high gains that some investments have. However, you may have the opportunity for reasonable gains, depending on the factors mentioned above. It is a trade-off. But, you may feel that it is worth it. You can potentially have growth with an FIA, but also keep your money safe.

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