What Is a Fixed Indexed Annuity?
A Fixed Indexed Annuity (FIA) is a long-term financial product that offers growth potential linked to a market index (like the S&P 500), protection from market loss, and the option for guaranteed lifetime income. It’s designed for individuals looking for a safer alternative to investing directly in the stock market.
Qualified vs. Non-Qualified Annuities
| Type | Qualified | Non-Qualified |
|---|---|---|
| Funded With | Pre-tax dollars (IRA, 401(k), etc.) | After-tax dollars |
| Tax Treatment | Tax-deferred growth; taxed on withdrawal | Only interest is taxed when withdrawn |
| Contribution Limits | Yes, based on IRS limits | No contribution limits |
| Best For | Retirement accounts | Extra savings outside of retirement plans |
Key Benefits
- Protection from market downturns
- Tax-deferred growth
- Potential for higher returns than fixed annuities
- No direct market investment
- Guaranteed income options for retirement
- Death benefits to beneficiaries
This Right for You?
Fixed Indexed Annuities may be a good fit if:
- You’re nearing retirement and want to protect your savings
- You seek moderate growth without market risk
- You want future income options you can’t outlive
- You want tax-deferred accumulation
Disclaimer: Fixed Indexed Annuities are insurance products and not investments. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. This page is for informational purposes only and is not intended as tax or investment advice. Please consult with a licensed professional before making any financial decision.
