Using the Fixed Indexing Strategy for Annuities

A Fixed Index Annuity (FIA) is a retirement savings product offered by insurance companies that combines the stability of a fixed annuity with the growth potential of a market index, such as the S&P 500. When you invest in an FIA, your principal is protected—you won’t lose money due to market downturns. Instead of directly investing in the market, the insurance company credits your account with interest based on the performance of a chosen index. There’s usually a cap (maximum interest you can earn), a participation rate (percentage of the index gain you're credited), or a spread (subtracted from the index gain). FIAs can also offer lifetime income riders, providing guaranteed income in retirement, and some include benefits like long-term care or death benefits. Overall, they’re ideal for conservative investors seeking a balance between protection and growth, especially for retirement income planning.