Innovative New Annuity Products Hitting the Market

By Cathy DeWitt Dunn

Planning for retirement can be a confusing and stressful process, from the limitless array of investments available to complex end-of-life decisions. Making the choices that will be right for you is not always an easy endeavor, especially when it comes to purchasing a product that delivers a reliable retirement income stream. For those looking for strength, reliability, and consistency, an annuity can be an exceptional option. While annuities are available in many different forms, a fixed index annuity, or FIA, offers a unique combination of security and growth, providing the opportunity to earn more on your nest egg, as well as 100% protection your principal from loss.

A New Approach to Indexing Delivers More Diversify, Opportunity for Strong Returns

With FIAs, your money earns interest based on any positive changes to an external index over a set period of time. If the index goes up, you receive a portion of the upside. If the index falls, your contract value – including any interest you’ve earned in the past – is not affected.

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New Indexing Options

In the past, fixed index annuities have commonly been tied to better known indexes such as the Dow Jones Industrial Average (DJIA) or the S&P 500. Now, insurance carriers are mixing things up, offering brand new annuity products that are more diverse than ever. For example, instead of tracking the S&P 500, newer FIAs may track the multi-asset J.P. Morgan MOZAIC Index. Over the last six years, the J.P. Morgan MOZAIC Index has averaged returns of 4.9% annualized boasting an aggressive end result for a reliable long-term product option. By tracking a broader, more diversified index like the MOZAIC, the new annuity products are intended to create strong, dependable returns that also hedge against market volatility.

The Benefits of FIAs

FIAs are a popular retirement income planning choice for retirees and pre-retirees across the country. Like variable annuities, fixed index annuities allow retirees to create an income stream – much like a private pension – that will last throughout retirement. However, fixed index annuities also provide protection from market downturns and commonly have much lower fee structures.

Maintaining your standard of living in retirement may seem like an uphill battle, but the right annuity can provide the benefits you deserve, even if the market lets you down. The newer generation of FIAs is designed to offer protection for both principal and any interest earned while also delivering the opportunity to grow your nest egg in a new, innovative way – now and during retirement.

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