An annuity is a retirement planning tool that offers safety, growth, and guarantees. All earnings in an annuity grow income tax-deferred until withdrawn. This means money that would have otherwise been used to pay taxes can remain in your annuity and compound over time. Annuities provide a stream of income payments that can be designed to fit your needs – even paying out over your entire lifetime.
A multi-year guaranteed annuity, or MYGA, is an annuity that provides a guaranteed fixed interest rate for a specified period of time.
An indexed annuity is a type of fixed annuity in which the interest rate is based on the performance of a financial index, such as the S&P 500® Index. The interest paid is calculated based on changes in the index.
Indexed annuities offer the potential to outperform traditional fixed annuities when there are gains in the index. However, unlike variable annuities, index annuities offer downside protection. This means even if the index declines, the annuity will not lose value. Also, once earnings are calculated they are locked in for life – they never change as a result of poor market conditions.
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