• Home
  • E-Booklets
  • Pay Less Tax
  • Privacy Policy
  • Cheatsheets
  • Contact Us
  • About us

Retirement Income

New Ways to Get More Retirement Income

  • Retirement Advisors
  • Retirement Insurance
  • Retirement Investing
  • Retirement Living
  • Retirement Planning

How to Make the Most of Maturing Equity Indexed Annuities

Posted on September 2, 2011 by bobrichards

Did you invest in equity-indexed annuities a few years back? If you bought one seven years ago, the maturity date may be approaching fast, and you might only have a small window of time to decide whether to renew the annuity or place your money elsewhere. You are likely feeling very fortunate having made a guaranteed investment given what has happened to your friends with mutual funds or stocks.

If you look at what has happened to annuity interest rates and the markets since you bought your equity index annuity, you may understand why the specifications for a new contract might differ. Annuity rates are at a four-decade low, and the markets have swung wildly. Therefore, there's a good chance that you will see lower market participation rates and lower maximums (caps) on amounts credited to your equity index annuities. In addition, you may have to make a longer-term commitment on your new contract.

whereas older contracts may have fixed the participation rate and market cap for the length of the contract, you may find that the renewal contract might now have the ability to change participation and cap rates on the annual anniversary dates. However, this could work in your favor. Because if the equity markets become less volatile, there's the chance that index option premiums will decrease (the index options are a cost to the insurance company), thus allowing annuity companies to offer higher annual participation levels and caps in the next 1 to 3 years on newly issued equity indexed annuities.

Times have changed and many of our investments have as well, and new equity indexed annuities might not be identical to the one you bought before. Nevertheless, it will still provide the same opportunity for tax-deferred growth and the other features that encouraged you to make your original purchase.

Talk to an experienced agent to evaluate your current equity indexed annuity and compare it to the new one that your annuity company offers. Ask the agent to see how it measures up to other annuity companies' products. Pay particular attention to the surrender period and avoid getting locked in for an inappropriate term.  Equity indexed annuities have a great return on investment in most cases.

Note: There may be risks with equity indexed annuities that include, but are not limited to, the fact that the return is calculated at the end of the vesting period; often, the investor cannot access cash prior to the end of the vesting period without restriction; each annuity is subject to fees and charges; and withdrawals may be subject to surrender charges. These restrictions have an impact on performance and must be considered when deciding to purchase or exchange the annuity.

Most Annuity Owners Make This Mistake

To get wealthy, invest like the wealthy
  • Why the wealthy steer clear of mutual funds
  • How the rich systematically make money in the market
  • Key metrics that differentiate good and bad investments
  • A comparison of ETFs and separately managed accounts you have never seen
  • Stop making the same investing mistakes as everyone else who listens to CNBC and reads Money Magazine. Do what the rich do! Free guide explains how they think and make investment choices.

    You might also like:

    • Retirement Solutions— Difficult Trends and What You Can Do
      Retirement Solutions— Difficult Trends and What You Can Do
    • Average Retirement Savings by Age – How Do You Compare?
      Average Retirement Savings by Age – How Do You Compare?
    • Estate Financial Planning Has Nothing to Do With Your Wealth
      Estate Financial Planning Has Nothing to Do With Your Wealth
    • Update on Social Security Cash Flow
      Update on Social Security Cash Flow
    • Use Life Insurance in Estate Planning to Treat Beneficiaries Equally
      Use Life Insurance in Estate Planning to Treat…
    • What's the True Cost of Senior Healthcare
      What's the True Cost of Senior Healthcare

    Filed Under: Annuities for Income

    About bobrichards

    Bob Richards
    Editor | Involved in Various Marketing Positions within the Financial Services Industry

    Leave a Reply Cancel reply

    Your email address will not be published. Required fields are marked *

    Second place winner best retirement blog

    SH award winner SMALL (1)

    Not Enough Savings to Retire?
    Learn Six Ways to Earn Retirement Income (from home)

    You do not need special talents, skills, computer knowledge, etc. We show you multiple ways others are working a few hours a week to generate a comfortable retirement income.

    Download Free Copy

    Latest Posts

    Update on Social Security Cash Flow

    Update on Social Security Cash Flow

    What's the True Cost of Senior Healthcare

    What's the True Cost of Senior Healthcare

    Social Security Office Cheating Retirees

    Social Security Office Cheating Retirees

    Use Life Insurance in Estate Planning to Treat Beneficiaries Equally

    Use Life Insurance in Estate Planning to Treat Beneficiaries Equally

    Estate Financial Planning Has Nothing to Do With Your Wealth

    Estate Financial Planning Has Nothing to Do With Your Wealth

    Categories

    • 401K IRA Roth Withdrawals, Distributions, and Rollovers
    • Annuities for Income
    • Estate Planning
    • Retirement Advisors
    • Retirement Insurance
    • Retirement Investing
    • Retirement Living
    • Retirement Planning
    • Social Security
    • Supplemental Retirement Income
    • Tax Savings
    • Alternative Investments
    • E-Booklets
    • Pay Less Tax
    • Privacy Policy
    • Cheatsheets
    • Contact Us
    • Subscribe
    • Sitemap

    Recent Posts

    • Update on Social Security Cash Flow
    • What's the True Cost of Senior Healthcare
    • Social Security Office Cheating Retirees
    • Use Life Insurance in Estate Planning to Treat Beneficiaries Equally
    • Estate Financial Planning Has Nothing to Do With Your Wealth

    The Retirement Income Blog

    25A Crescent Drive #1508
    Pleasant Hill CA 94523
    T: 844-887-4131
    E: [email protected]

    © 2018 Retirement Income