How Do Fixed Annuities Work?

Have you ever wondered how Fixed Annuities work? Watch as our advisors, Michael and Seth explain how this investment works. Catch the full episode here!

Fixed index annuities are designed to meet long-term needs for retirement income. They provide guarantees of principal and credited interest, and a death benefit for beneficiaries. The interest credited on your contract may be affected by the performance of an external index. However, your contract does not directly participate in the index or any equity or fixed interest investments. You are not buying shares in an index. They are subject to surrender charges and may have applicable fees. Guarantees are backed by the financial strength of the issuing company. Annuities are not bank or FDIC insured. Annuities are insurance products that may be subject to restrictions, surrender charges, holding periods, or early withdrawal fees which vary by carrier. Riders are generally optional and have an additional associated cost. Annuities are not bank or FDIC insured. Withdrawals from the contract will reduce the contract value and other benefits under the contract. Withdrawals that exceed any free withdrawal amount during the surrender charge period will be subject to a surrender charge. All withdrawals are subject to ordinary income tax, and if taken prior to age 591/2 may be subject to an additional 10 percent federal tax. Life insurance policies are contracts between the client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Purchasing an annuity inside a qualified plan (retirement plan) that provides a tax deferral under the Internal Revenue Code provides no additional tax benefits. An annuity used to fund a tax qualified retirement plan should be selected based on features other than the tax deferral. All of the annuity's features, risks, limitations and costs should be considered prior to purchasing an annuity inside a qualified retirement plan. Investing involves risk, including the potential loss of principal. Any references to protection benefits, safety, security, lifetime income, etc generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Sears Wealth Management & Insurance Solutions is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Sears Wealth Management & Insurance Solutions are not affiliated companies. Michael Sears CA License # 0757582, Seth Morris CA License # 4060606. 971239-7/21