An indexed annuity is a special class of annuities that yields returns on contributions based on a specified equity-based index. Employees can purchase these annuities from The Benefit Coordinators, and similar to other types of annuities, the terms and conditions associated with payouts depend on what the original annuity contract says.
Indexed annuities offer annuitants the opportunity to earn higher yields based on stock market performance with protection against market declines. However, it is also possible for an annuitant to experience a lower-than-expected yield due to the combination of caps on the maximum amount of interest earned. The real challenge is in understanding how an indexed annuity works as it is more complex than a fixed annuity.
Did You Know?
The Government Accounting Office recommends annuities for retirement purposes.
They offer a retirement safety net.
Many index annuities guarantee a modest annual yield plus gains linked to a stock market index.