Looking to secure a stable retirement? More people in retirement are now using Equity Index Annuities as a viable solution to protect their retirement accounts. David Snavely, one of most respected financial experts in the country and founder of Sound Investment Services, presents the case for EIAs, along with the reasons why these financial products belong in your retirement strategy.
What Are Equity Index Annuities?
Equity Index Annuities is a fixed annuity that brings together growth and income in one product. Whereas traditional fixed annuities pay out a fixed rate, an EIA directly links returns to a stock market index, like the S&P 500. This allows the policyholder to directly benefit from the gains of the market but not lose their principal in the market as the account is protected from market losses.
Principal protection
Some of the most important benefits associated with Equity Index Annuities are protection for your principal investment. David Snavely maintains that a good EIA can provide safety of principal for the investor, regardless of any fluctuations in the underlying Index. This means that even when the stock market goes down, you aren’t going to lose the hard-earned money that you had initially invested. This principal protection feature is especially attractive to retirees or those close to retirement looking to protect their IRA or other savings accounts but are still seeking growth.
Growth Potential
Equity Index Annuities provide an opportunity for growth by crediting interest based upon a particular stock market index. As David Snavely above notes, though EIA’s will not have the high returns that an individual stock can achieve, but can offer a middle way toward growth via a protected stock index. As such, a policyholder will be able to reap benefits from good market performance without being exposing to the full risk of market and downside volatility. The potential for growth, together with a guarantees and a minimum return, guarantees make EIAs an attractive alternative for obtaining steady growth and income in retirement.
Guaranteed Income
Most individuals place a premium on having a stable and predictable income stream in retirement. EIAs can bring that about through payout options that include lifetime income riders. For David Snavely, the riders can provide guaranteed flow of lifetime income regardless of how the markets perform. This can bring peace of mind with that comes with having a reliable source of income to cover living expenses, in your lifetime.
Tax Benefits
Tax advantages with equity-indexed annuities can also help increase your overall financial strategy. In EIAs, earnings grow tax-deferred; one will not be paying taxes on investment gains until one withdraws the funds. According to David Snavely, this powerful deferral strategy makes your money compound and grow more quickly unburdened by annual taxes. This is also useful for one who might be interested in controlling tax liabilities at retirement.
Customization and Flexibility
Another dimension of Equity Index Annuities is their flexibility. Many EIAs will have options to customize your annuity to suit your particular needs and goals. David Snavely’s firm, Sound Investment Services, works directly with clients in customizing annuity contracts based on a person’s financial situation. This can include the selection of different indexes, adjusting cap rates, and choosing riders that help in achieving your retirement objectives, also some EIA’s offer enhanced death benefits options for an added fee.
Protection Against Inflation
Over time, inflation could erode your retirement savings, an Equity Index Annuities may contain features to help safeguard against inflation. David Snavely informs clients of all the annuities where the insurance carrier includes inflation protection riders that guarantee your income measure will be kept up-to-date with inflated living costs. This added COLA protection may help ensure and maintain your standard of living throughout retirement.
Why Should You Consider Purchasing EIAs
With all the benefits that an equity index annuitiy can bring to the table, David Snavely highly suggests positioning them within the framework of a holistic retirement plan. In effect, principal protection, growth potential, guaranteed income, tax advantages, and flexibility make EIAs very attractive to so many people. Using EIAs in your retirement planning will let you rest easy in knowing that your retirement money is both safe and working to its fullest potential.
In summary, Equity Index Annuities provide an array of benefits that greatly enhance one’s financial plan in retirement. David Snavely is a financial professional who specializes in providing retirement income solutions and has over 40 years of experience in protecting your retirement. If you are looking to diversify your retirement portfolio, maybe it’s time to consider how an Equity Index Annuity can benefit you to achieve a worry free retirement.
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