Should I buy an indexed annuity?

Like any financial product, there are pros and cons to consider before buying an indexed annuity. If you want help figuring out how an indexed annuity might fit into your retirement plan, consider working with a financial advisor. What Is an Indexed Annuity? An indexed annuity is a hybrid annuity type.

What is an indexed annuity?

An indexed annuity is a hybrid annuity type. In other words, they take features from both fixed and variable annuities, with some extra added protections. Variable annuities are annuities where your payout is determined based on the performance of the investments made with the money you pay into the annuity.

Are Equity Indexed annuities safe?

Equity indexed annuities may be safer than investing directly in index funds, because the annuity company protects you against losses. That, of course, comes with the tradeoff that you won’t earn the same high returns that an index fund outside of an annuity might have.