Fixed Indexed Annuity Basics for Retirees: Pros, Cons, and How They Work
Are you confused about annuities and wondering if they have any place in your retirement plan? In this video, I walk you through the facts and misconceptions surrounding fixed indexed annuities. You'll learn how they work, how they differ from other types of annuities, and how they can offer protected growth, income flexibility, and confidence in retirement. Watch to learn whether they could be a valuable part of your own retirement strategy.
Video from Oak Harvest Insurance Services, LLC
00:00 Misconceptions about Annuities
00:37 Types of Annuities
01:21 Why Annuities Often Get a Bad Rep
01:41 Defining “Fixed Indexed Annuity”
02:02 Comparison with Other Annuities
02:53 Lifetime Income Option
03:35 Features of Fixed Indexed Annuities
04:57 Participation Rates and Caps
06:11 Visual Explanation: Contract Years
07:52 Limitations of FIAs
08:22 10% Annual Liquidity
09:03 Surrender Schedules
11:18 Why Retirement Planners Use FIAs
12:12 Optional Income Riders
13:10 Case Example with Income Plan
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Disclaimer:
Hypothetical outcomes do not reflect actual results and are not guarantees of future results. Any index references herein are unmanaged and cannot be directly invested into. Past performance is no indication of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing or tax savings strategy will be successful. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser. Insurance services are provided through Oak Harvest Insurance Services, LLC, a licensed insurance agency.
Insurance services are provided through Oak Harvest Insurance Services, LLC, a licensed insurance agency. Some Oak Harvest investment adviser representatives are also independent insurance agents. The insurance agents and Oak Harvest Insurance Services, LLC earn combined commissions up to 8% for selling insurance products, in addition to other compensation.
Annuities are long-term contracts with limited liquidity that are designed for retirement. Returns may be limited by caps, spreads, surrender charges, early withdrawal penalties, and other fees stated in the annuity contract. Retirement accounts such as IRAs can be tax-deferred regardless of whether or not they are funded with an annuity. The purchase of an annuity within an IRA does not provide additional tax-deferred treatment of earnings. Withdrawals may be subject to federal and/or state income taxes. A 10% federal early withdrawal tax penalty may apply if taken before age 59 ½ in addition to ordinary income tax. Partial withdrawals may reduce benefits and contract value.
Annuities are not guaranteed by any bank or credit union and are not insured by the FDIC or any other governmental agency. Some annuities could go down in value. Annuity and life insurance guarantees are backed by the claims paying ability of the issuing insurance company. If the insurance company encounters financial difficulties, there is a possibility that they may be unable to meet their obligations.
All information provided is general in nature and is for educational purposes only. It is not intended to provide specific financial, legal or tax advice. Consult a professional regarding your specific situation.