Questions to Ask When Purchasing a Fixed Indexed Annuity

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Scott Turney and Turney Financial Group, LLC; Sparta, TN. Insurance licensed in 51 jurisdictions.
Speaker 1: Americans are living longer and spending more time in retirement. That means many of us may be wondering if our retirement money will last, and if we’ll be able to enjoy our same standard of living as the years go by.

In addition to social security, a pension, 401(k) or IRA, a fixed indexed annuity may be good to have in your financial mix. Since they are tied to a market index, fixed indexed annuities offer the opportunity for growth as the market rises. At the same time, they protect your principal from the uncertainty of market volatility. Like all annuities, they earn tax-deferred interest to help your money grow even more and they can give you a steady stream of guaranteed income for life.

We all have different needs in retirement. So, before you talk to your insurance agent, it’s best to have a clear picture of what you want from a fixed indexed annuity.
First, how much retirement income do you need beyond the resources you already have? Consider things like where you want to live, your monthly expenses and activities you want to pursue in retirement.

Second, think about how and when you’d like to access the money in your annuity. One lump sum or payments over time. More money in the near time or down the road?

And perhaps most importantly, what is your tolerance for financial risk? Are many of your other financial assets in high risk products like stocks, or in safer products like indexed annuities?

When you do meet with your insurance agent, be sure to discuss specific features of the indexed annuity you are considering. Such as, how is the interest calculated and applied? What are the terms and conditions for receiving payments? Are there extra charges for withdrawals if something major comes up in your life? And what, if any, penalties must you pay for ending your contract early?

Next, do some research on the company issuing the annuity contract. Make sure they have a solid track record. Confirm that the company is licensed in your state, and that they are reputable and financially strong. It’s reassuring to know that top insurance companies that provide annuities have successfully weathered many economic times and financial environments. And typically, there are state guarantee associations to back up your contract.

Learn more at and get your smart buyer checklist.

It’s worth taking a little time now to make your best choices for the years to come.

Scott Turney and Turney Financial Group, LLC; Sparta, TN. Insurance licensed in 51 jurisdictions.

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