Do Fixed Index Annuities have fees?
Are fixed index annuities a good investment?
It is important to note that a fixed index annuity is an insurance contract issued by an insurance company and is not a security. As such, they will not generate equity-like returns. They are a good retirement savings vehicle that provides a safe and steady way to grow your retirement savings.
What fixed index annuity disadvantages?
- Gains are limited by a crediting method or “limiting factor”
- Fixed index annuity contracts can be complex and difficult to compare
- Indexed annuity contracts vary greatly from insurance company to company
- They are highly customizable and typically require an experts assistance
- Surrender penalties for withdrawals above the annual free withdrawal provision
- Potential 10% IRS tax penalty for withdrawals prior to age 59 ½
- Interest crediting factors (cap, participation rate and spreads) can change on the contract anniversary date.