Index Annuities

Annuities were designed to be a reliable means of securing steady cash flow for an individual during their retirement years and to alleviate fears of the longevity risk of outliving one’s assets. Annuities can also be created to turn a substantial lump sum into steady cash flow, such as for winners of large cash settlements from a lawsuit or from lottery winning. An index annuity gives the contract owner the benefit of having a private pension plan. An annuity is a popular option for retirees or soon to retire individuals, because in most cases at retirement many individuals need to make their career savings last the remainder of their life. In addition to making savings last, index annuities, are unique hybrid accounts that provide, safety when the stock market is negative that given year, however, there are strategies that promote significant account growth in a positive stock market. Similar to pension plans an annuity feature is referred to as an income rider; if an income rider is placed on a retiree annuity that income rider’s purpose, is to provide income for life.



  • Potential for stock market like growth
  • Account/ principal protection in negative markets
  • Potential income for life
  • Sophisticated metrics used interest earned potential
  • Accumulative liquidity Ex. On the year to year basis the account owner will have access to funds without penalty
  • Potential for tax-deferral
  • Upon death the account owner can leave assets to beneficiaries or a trust


  • Not a liquid savings account. if excessive withdrawals are taken, you can be charged a fee
  • Gains have limitations in a high soaring economy
  • Account growth is predicated upon the stock market

A scenario where an Index Annuities contract, can be a great fit into one’s portfolio is the following.

  • Wants to preserve account principal
  • Once rolling over a 401 (k) taxes can be deferred until 70 1/2
  • Can leave account to beneficiaries
  • Want to maintain access to their lump sum
  • Can be used as a primary source for retirement
  • Looking to get aa head start with retirement savings
  • Don’t want to wait until 59 1/2 to have access to account funds without penalties