Index Annuities have gained in popularity. Preservation of capital is the number one rule of investing and Index annuities offer an opportunity to implement that rule. For the more conservative investor who is concerned with market down turns Index annuities may be your answer. Index annuities let you contribute and participate in the potential growth of the market while protecting your investment when the e inevitable bear market shows it face. Your investment is protected at a certain pre-determined rate. In short your principal and accrued interest cannot go down due to market slowdowns or declines.
The process begins with the investor purchasing a annuity contract with a single lump sum payment. Earnings for your annuity are driven and linked to select equity indexes. When the market goes up you receive the gains up to the annual interest rate cap. When the market declines, you sit tight with your investment protected.
This formula appeals to many investors. Rarely does investing afford you an opportunity to have your cake and eat it too, but that is exactly what index annuities provide. Index annuities offer higher returns than traditional fixed rate investment vehicles. Payouts offer many options for providing for your retirement income streams. Contracts typically are for 5-year periods, a perfect time frame to give index annuities a try. Remember diversification and balance should be foundational to your investment strategy. Incorporating index annuities to your retirement portfolio just might to the trick
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