Indexed Annuity Pros And Cons

Pros As with all annuity types indexed annuities are tax-deferred products.

Indexed annuity pros and cons. To be sure I wasnt missing something I posed this question to my fee-only advisor study group recently. Returns of an Annuity Might Not Match Investment Returns. They do in fact have no downside risk.

Pros and Cons of Indexed Annuities Indexed annuities are a low-risk alternative to variable annuities and provide a guaranteed stream of income. List of the Pros of Indexed Annuities 1. Money grows on a tax-deferred basis.

10 IRS Penalty Withdrawing income before the age of 595 results in a 10 IRS tax penalty. List of the Cons of a Fixed Index Annuity. Index gains are permanently locked in when the index option expires.

Index gains are locked in. If the stock market underperforms you dont lose money. Indexed Annuities Pros.

That could mean more money for your investments. Many indexed annuities have a minimum interest guarantee. Full protection of principal.

Indexed annuities do provide more growth. Indexed annuities are less reliable than fixed annuities since fixed annuities essentially offer fixed interest rates and a guaranteed minimum income. Lets say you invest in an indexed annuity.