Debunking 12 Myths About Fixed Indexed Annuities

To mark Annuity Awareness Month this June, the Indexed Annuity Leadership Council is debunking the top 12 myths about FIAs.

1. Myth: FIA policyholders assume risk

Fact: With FIAs, your principal can never decline in value due to index volatility

2. Myth: People buy FIAs for higher returns

Fact: People buy FIAs for safety of principal and guaranteed lifetime income

3. Myth: Companies keep value of annuities upon death

Fact: FIAs can allow proceeds to go directly to a beneficiary in the case of a death

4. Myth: FIA owners have no access to their funds to help in lifestyle changes

Fact: FIAs can include enhanced benefits. Riders and other contractual benefits are generally available to help consumers in a time of need.

5. Myth: FIAs are only for conservative savers

Fact: FIAs can be a key component of a balanced financial plan

6. Myth: FIAs are for more savvy savers

Fact: FIAs can be a retirement product for savers at any level

7. Myth: Any retirement account can help generate lifetime income

Fact: FIAs can guarantee a steady lifetime income stream

8. Myth: Withdrawing monthly from retirement accounts is the same as a FIA

Fact: FIAs offer the benefit of a steady lifetime income with minimum guaranteed interest credits

9. Myth: There are no tax benefits to FIAs

Fact: FIAs can offer tax-deferred growth

10. Myth: Only retirees purchase

Fact: Even younger savers are interested in FIAs, recognizing the benefits of growth and balance

11. Myth: FIAs are a risky way to save for retirement

Fact: FIAs protect your principal from the uncertainty of market volatility

12. Myth: FIAs offer no growth

Fact: FIAs protect your principal, while still giving you potential interest credits – assuming no early withdrawals