Each individual is different. Here are 5 critical questions to ask yourself before looking into an annuity.

Indexed Annuity Risk
#1 – Do I want risk?

Market investments exist inside and outside of annuity options. Mutual funds, stocks, and variable annuities all rely on different aspects of the market for growth. At the same time, these options put your money at risk. Indexed and fixed annuities do not have the risk associated with market loss.

Indexed Annuity Competitive Growth
#2 – Do annuities offer competitive growth potential?

Indexed and fixed annuities both allow for growth. Because fixed annuities are tied to interest rates they are not currently performing at levels that we think are worthwhile. Indexed annuities offer us the upside growth of the market without the downside. Although we give up a certain portion of our growth, we get safety in return which can be a great option that can often exceed our goals overtime.

Indexed Annuity Long Term Investment
#3 – Am I looking for a long-term strategy?

Indexed annuities can offer us significant growth over the long-term. However, because of these benefits, they are often a long-term strategy. Annuities that offer us the best growth options also have surrender stipulations for those who do not keep their annuity long-term. A long-term mindset will help you get the most out of your annuity.

Income for Life
#4 – Is income for life right for me?

Income for life is a rider, or add-on, that certain indexed annuities offer. An income for life rider guarantees that the annuity will pay out a certain amount of money in income when the annuity matures. This gives those preparing for retirement a way to plan their future with more certainty.

Indexed Annuity Tax Deferred
#5 – Do I want to keep my money tax-deferred?

Often, annuities are purchased inside an IRA or after a 401k rollover. Keeping money tax-deferred can be a major benefit to those planning for retirement properly. For those looking to pay taxes and then invest, cash value life insurance may be a better option. However, for those looking to keep their money tax-deferred, indexed annuities may be the better choice.

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