With Recent Market Conditions, Are Equity Indexed Annuities a Good Option For Retirement Savings?
With the recent market turmoil and uncertainty, equity indexed annuities may be a good option for someone nervous about having their retirement savings being exposed to the volatility of the stock market. Equity indexed annuities were introduced in 1995 and have become increasingly popular ever since. Index annuities are underwritten by insurance companies that provide a minimum guaranteed return with excess interest crediting based on the performance of an outside index, such as the S&P 500, Russell 2000, etc. So how do you know if you are suitable for such a product? That depends on several factors – most importantly, the investor’s time frame and purpose of the investment. If you are a short term investor looking for maximum return, then an equity indexed annuity is not for you. Annuities are meant for long-term retirement savings. If you are looking for double-digit returns on your investment, you are not going to find them in an index annuity. If you feel you need to adjust your p
