In an unpredictable financial landscape, protecting your hard-earned money is more critical than ever. Recent market volatility has underscored the risks of relying solely on Wall Street for wealth growth and retirement security. Fixed indexed annuities (FIAs) offer a solution—combining principal protection with the potential for growth tied to market performance.
At Paradigm Life, we believe in empowering clients with financial tools that provide stability and long-term benefits. Fixed indexed annuities complement our signature Perpetual Wealth Strategy™, offering a secure, strategic way to grow and protect your assets.
How Fixed Index Annuities Work
Fixed indexed annuities are unique insurance products designed to protect your principal while offering growth opportunities linked to a market index, such as the S&P 500. Unlike direct market investments, FIAs shield you from losses during market downturns while allowing you to benefit from market upswings.
- Market-linked growth: Your annuity’s interest is calculated based on the performance of a chosen index. If the index rises, your annuity earns interest, up to a specified cap. If the index falls, your principal remains secure, with no losses.
- Tax advantages: Earnings grow tax-deferred, allowing your investment to compound more efficiently.
- Guaranteed income: FIAs can provide a reliable income stream in retirement, ensuring you never outlive your savings.
For a great video illustrating how both fixed annuities and indexed annuities work, and how they differ from variable annuities, check out this page from the Indexed Annuities Leadership Council.
Why Choose Fixed Indexed Annuities?
Fixed indexed annuities offer several key benefits that make them an attractive option for individuals looking to fortify their financial strategies:
- Principal protection: Your initial investment is shielded from market downturns, giving you peace of mind during volatile times.
- Growth potential: Benefit from market gains without the risk of losing your earnings during a decline.
- Tax-deferred growth: FIAs allow your money to grow without immediate tax implications, helping you build wealth more efficiently.
- No annual contribution limits: Unlike IRAs or 401(k)s, FIAs let you invest as much as you’d like, providing flexibility for catching up on retirement savings.
- Lifetime income: Enjoy the confidence of knowing you’ll have guaranteed income in retirement, tailored to your needs.
How Much Does a Fixed Annuity Cost?
The cost of an annuity depends upon the type of annuity purchased, the payout period, and the amount of income the owner wishes to receive from their annuity, among other factors. Like many financial products, annuities are customizable based on your personal goals and income.
How to Use a Fixed Indexed Annuity from Your Insurance Company
At Paradigm Life, we specialize in helping clients implement financial tools that protect and grow their wealth. While our signature whole life policies are exceptional for creating financial stability, optimizing cash flow, and offering long-term growth opportunities, they are just one part of a well-rounded strategy.
Fixed Indexed Annuities (FIAs) serve as a powerful complementary tool, particularly for individuals looking to safeguard and grow their retirement savings. These annuities are especially effective for protecting the assets in your 401(k) or IRA, ensuring your hard-earned dollars are secure and continue to grow without exposure to market losses.
Now Is the Best Time for an Annuity
In today’s uncertain financial landscape, fixed indexed annuities (FIAs) offer a powerful solution to protect and grow your wealth. These products are uniquely positioned to deliver principal protection while allowing you to earn steady, conservative interest credits that you get to keep—regardless of market conditions.
Why FIAs Are Especially Valuable After a Market Downturn
Market downturns create a unique opportunity for fixed indexed annuities to shine. Here’s why:
- Capitalizing on market recovery: After a market downswing, indices often experience several years of recovery or “up years.” By linking your FIA to a market index, you can earn positive interest credits during these periods without risking your principal. Unlike traditional investments, FIAs don’t require the market to recover its previous losses for you to see gains—each year starts fresh.
- Locking in gains: With FIAs, your gains are locked in annually. This means the interest you earn during market upswings is permanently added to your account value, protecting it from future losses.
- Avoiding further losses: Waiting to “recover losses” by staying solely in market-dependent assets exposes your portfolio to additional risk during the next downturn. FIAs provide a safer, dependable way to grow your accounts and rebuild your wealth without the uncertainty of market volatility.
The Opportunity to Build New Value
Rather than simply regaining lost value, fixed indexed annuities enable you to create new value from day one. By shifting a portion of your portfolio into an FIA, you can:
- Diversify your strategy: Protect part of your wealth from market risk while maintaining growth potential.
- Strengthen your financial resilience: Gain peace of mind knowing your principal is secure, even in a volatile market.
- Accelerate recovery: Use locked-in gains and consistent growth to rebuild your portfolio faster and more reliably.
The Power of Protection
The following graphs from American Equity Investment Life Insurance Company, one of the many top-rated mutual insurance companies we work with, outlines The Power of Protection offered by fixed indexed annuities.
Each contract year, the underlying index amount’s ending value becomes the starting value for the index performance next year. The index does not have to make up losses to earn interest. A Fixed Index Annuity makes this kind of protection possible.
When you grow your wealth without being exposed to loss, you don’t have to settle for regaining lost value. You can build new value from day one.
We have the experience and expertise at Paradigm Life to help you determine if rolling over a portion of your 401(k) or IRA into a fixed indexed annuity account would help strengthen your portfolio.
Where a Wealth Strategist Fits In
A successful financial strategy begins with understanding not just the “what” but the “why.” It’s essential to know how your financial tools work, why you have them, and what they are designed to accomplish. At Paradigm Life, we prioritize education, offering personalized guidance at no cost to ensure you’re fully informed and confident in your financial decisions.
How Paradigm Life Wealth Strategists Support You
When it comes to fixed indexed annuities (FIAs), our Wealth Strategists are here to:
- Demystify annuities:
- Learn how FIAs protect your wealth during market downturns while positioning your assets to earn interest tied to market growth.
- Understand how principal protection and locked-in gains work to safeguard your financial future.
- Evaluate your portfolio:
- Receive tailored advice on how much of your 401(k) or IRA to keep exposed to market volatility versus how much to allocate into a secure, growth-oriented FIA.
- Customize your account:
- Work with us to create an FIA account that aligns with your unique financial goals, whether it’s for retirement income, long-term growth, or wealth preservation.
- Simplify the rollover process:
- Rolling over part of your 401(k) or IRA into an FIA can be complex, but we handle the details to ensure a smooth, stress-free transition.
- Provide ongoing support:
- Financial goals evolve over time. Our Wealth Strategists will check in annually (or more frequently, if needed) to reevaluate your options and adjust your strategy as necessary.
Why Leading Companies and Individuals Choose FIAs
Prominent organizations like the New York Times and CBS have invested hundreds of millions of dollars into fixed indexed annuities to benefit their employees and retirees. Across the country, individuals rely on these accounts to safeguard their wealth and achieve consistent growth. The reasons are clear:
- Protection: Shield your principal from market losses.
- Growth: Earn interest tied to market performance without the risk of direct market investment.
- Stability: Create a financial foundation that supports both short-term security and long-term growth.
Is a Fixed Indexed Annuity Right for You?
FIAs are more than just a financial product—they’re a strategic way to balance security and growth in an unpredictable financial environment. Recent market downturns have highlighted the risks of relying solely on Wall Street, making now an ideal time to consider the stability FIAs offer.
- Recover and build wealth: Lock in gains during market recoveries and grow your portfolio without worrying about the next downturn.
- Strategic growth: Use FIAs not just as a safeguard, but as a proactive step toward building lasting financial health.
- Additional benefits: Enjoy features like tax-deferred growth, guaranteed income, and no annual contribution limits.
At Paradigm Life, our Wealth Strategists specialize in integrating fixed indexed annuities into broader financial strategies to create tailored, long-term solutions for our clients.
Contact us today for a complimentary consultation. We’ll provide personalized illustrations and actionable insights to help you achieve your financial goals—no strings attached.
Disclosure:
Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Guarantees do not apply to the performance of the index, which will fluctuate with market conditions. Annuities are designed to meet long-term needs of retirement income. Early withdrawal charges apply if money is withdrawn during the early withdrawal charge period. Before purchasing an annuity, read and understand the disclosure document for the early withdrawal charge schedule. The purchase of an annuity is an important financial decision. Talk to your financial professional to learn more about the risks and benefits of annuities.
