What Solutions Can An Index Annuity Provide?
Say that an individual has taken early retirement and has a lump sum pension plan distribution. The person will start drawing on these funds to provide income in a few years. The money could be invested in mutual funds. Over time, Fixed investments have produced high returns, but the stock market is fickle in the short term and could go down. An index annuity guards against risk to principal if the market goes down while providing higher upside potential than certificates of deposit. Or, a retired couple already owns traditional fixed annuities and are planning to leave the money in the annuities to their children. An index annuity assures them of earning at least a minimum return while giving them the possibility of bequeathing an even greater legacy. Or, many people invest their retirement funds in fixed rate instruments. This may be prudent for a worker in their fifties, but it’s a costly strategy for a thirty year old. An index annuity gives these workers guarantees and higher pote
