The Benefits of a Fixed Index Annuity

The Benefits of a Fixed Index Annuity

What others think about Fixed Index Annuities

How they work

Companies

Topics

We have found that there are basically three issues of importance

when a person invests money:

Tell me, in order of importance, what you think they are?

Safety

Returns

Liquidity

2008 Bond Returns:

High Yield Bond Funds -23.18%

Government Bond Funds -0.51%

Corporate Bond Funds -7.47%

Municipal Bond Funds -5.51%

From 5/03/2011 to 8/10/2011 the Dow dropped 16% !

Bond Values between 8/31/10 and 12/15/10...

iShares Barclays 20+ Year Treasury (TLT) -15.1% Vanguard Extended Duration Treasury ETF (EDV): - 23.4 %

Market Instability Continues to be the Norm -

Just imagine: Investors lost nearly a quarter of their money in less than four months in what many believe to be the world's safest investment —

U.S. Treasury Bonds.

QUESTION: Do Bonds or Bond Funds have the

potential to increase in value, in today’s interest rate environment?

* Money and Markets Archive Dec 23rd 2010

Today’s Bond Market

The market has averaged a downturn once every four years! In the past 56 years (1954 – 2012) it has had 14 down cycles.

From 2000 to 2013 the S&P has had NO GROWTH!

Look at the number of down years since 2000.

Trying to grow your money in the Market without a Safety Net is Risky.

We have seen 40% downturns so how long will it take to

recover from a 50% loss if it comes?

Keep in mind, you will need 100%in gains to recover from a 50% loss!

200,000 -40%

32,400

-80,000

-12,000

-12,000108,000

1st year Income

+30%

2nd year Income 128,400

-38,520

31,152

3rd year Income -12,000-30%

77,880

+40%4th year Income -12,000

97,032

Let’s Talk About Distribution

Example of how an up and down market with income withdrawals can effect the growth or recovery on your retirement account where a FIA is NOT used .

This hypothetical non FIA account is

down $103,000.

How much of that did you get to spend?

You only took out 48,000 in 4 years but the

account is down a lot more than 48,000.

Choosing the right Retirement Vehiclefor retirement can be difficult. . .

- No Risk - On one hand, you want the safety and guarantee of principal and past earnings.

In the past, Retirement Savers had to make a decision on which hand to choose from…

- Has Risk -On the other hand, most people prefer the potential of higher returns by being linked to the market, a return that a fixed rate investment cannot offer.

. . .That was then, this is NOW!

Now you can have the best of both worlds!

• Guarantee of principal with a minimum interest rate guarantee.

AND

• The potential to participate in stock market-linked growth.

$136,937

02’ 08’

100K

90K

80K

110K

120K

140K

130K

98’ 99’ 00’ 01’ 03’ 04’ 05’ 06’ 07’

150K

160K

09’

$125,080

$78,869

$111,033

$145,542

$156,857

$100,770$99,228

-27%

-21%

-23%

-9%

$146,853

S & P 500 Index Credits Min. GuaranteedContract Value

10’

$160,747

$108,789

170K

11’

$171,388

$107,857

$105,000

This line represents what it would have done in the income account if it would have had a Guaranteed Lifetime Income Rider that is now available with some annuities…5% Bonus with 4% MINIMUM roll up on Income Account for income planning purposes; Some products have even higher bonus and/or roll up rates.

$174,832

Federal Reserve Chairman Ben Bernanke has a majority of his liquid wealth - between $1 million and $2 million - invested in annuities …

22,000 Fed. Reserve Employees, have 75 percent of their assets - that's $3.2 billion, invested exclusively in annuity contracts…

Federal Employees have followed Uncle Ben in choosing Annuities vs. traditionally held

investments.

Research done by - Barry Dykes June 19, 2009 Article in Medical Economics

Ben Bernanke

It was created to compete with very popular index funds, mutual funds that track a stock market index. I have to admit I like the concept –

Pg 511

If you do not want to take any risks but still want to play the stock market, a good index annuity may be right for you. Pg. 513

Suze OrmanTHE ROAD TO WEALTH

A Fixed Index Annuity allows you to take advantage of market-type growth without the potential of any market-type loss.

In contrast to a stock or mutual fund vehicle where the investor bears the market risk, the Fixed Index Annuity design insulates you from the results of a market downturn.

The Benefits of a Fixed Index Annuity

Potential of Stock Market Linked Growth

Safety, Guarantees, and Growth Potential

An Fixed Index Annuity (FIA) provides you with all of the best features of a traditional fixed annuity; Plus gains linked to a stock-market Index.

• Guarantee of Principal

• Minimum Interest Guarantee

• The Power of Tax Deferral

• Potential of Stock-Market Linked Growth

The Benefits of an Fixed Index Annuity

There are basically three things that will cause you to run out of money -

Outlive it

Spend it

Lose it

Outlive it

Spend it

Lose it

Easy to Manage

Guaranteed Minimum Returns

Share in Market Gains but not the losses

Lifetime income stream for you and your spouse

No management or basic policy fee (fee possible with Income Riders)

401k, IRA, ROTH IRA, etc.: Roll-over eligible

Tax Deferral and Social Security Taxation Benefits

Hedge against health related costs: Income and Assets

Legacy Planning: Can avoid Probate

Review