Fixed Index Annuities

Fixed index annuities allow you to save for retirement and accumulate funds based on market performance, such as the S&P 500. They have more security than traditional investing, because the losses in the market come as a zero return on investment for you, instead of causing you to lose all the money you’ve saved up. It’s conservative, and gives you a chance to capitalize in times when the market is thriving. Once the funds are available for withdrawal, you will have a steady stream of income that you can live comfortably on.

Why Should I Get a Fixed Index Annuity?

This is the best option for someone torn between a fixed annuity and variable annuity. Fixed index annuities combine the pros of each and eliminate the cons. Like fixed annuities, fixed index annuities have stable returns and minimal risk. Fixed index annuities have the potential for higher investment returns like one would have with a variable annuity.

You’re protected in times when the market isn’t doing well. You’ll accrue your savings as usual, minus higher percentage returns. You won’t have to worry about being in the negative as you would if you were directly involved in the stock market.

How Does It Build? How Does Withdrawal Work?

The funds grow tax-deferred. While you’re adding to your future income stream during the accumulation phase, it’s not considered income in the eyes of the IRS. That is, until you start withdrawing your funds. You can make contributions as a single lump sum payment, or you can have flexible premiums in which you’re permitted to make multiple payments throughout the year.


If you withdraw funds before your annuitization phase begins, you’ll incur tax penalties. This is the surrender period, and it refers to the amount of time you have to wait before you can take funds without any surrender fees. How long the surrender period is depends on the policy you get. Some allow penalty-free withdrawals after 10 years, while others may be 15 or 20 years.

How Long Will I Be Able to Receive Payments?

This depends on your contract. You can get a lifetime contract in which the company will provide you with an income stream that you cannot outlive. You may also choose an option where the company disburses payments for 10, 15, or 20 years once you reach the annuitization phase.

Another choice is receiving the total amount of funds you’ve accumulated as a lump sum. You get everything at once, and allocate your gains as you see fit.

Build Your Retirement Your Way

At Coastal Insurance Planning, we help you with getting the most optimal annuity plan for you. When you call us, we can set you up with a fixed index annuity that suits your wants and needs.