Rollover

There are many benefits of rolling
over your IRA or 401K to an index, fixed or hybrid annuity

Why rollover your 401K, IRA or other retirement plans to a Fixed Index Annuity?

Retirement savings rule of thumb says that you should subtract your current age from 100 to determine the percentage of your retirement savings that you should invest in the stock and bond markets.

So, if you’re 50, you should have no more than 50% of your retirement savings invested in stocks/bonds. If you’re 70, then no more than 30% is recommended. The reason for this is that you have less years to recover from a significant market loss.

Can your retirement savings handle a 40% market downside?

Fixed Index Annuity VS 401K or IRA

  • Principal Protection: In FIA’s your account values are fully protected from any downside market risk. In an IRA or 401K where the funds are allocated into stock or bond mutual funds, if they are down 20, 30 or 40% in a year your account value goes down by that amount. In an FIA you can allocate your funds in different strategies like the S&P 500 or Nasdaq. However, when the markets you’re allocated in have a negative year you simply get a zero. All prior year interests credited to your account are “locked-in”, and they’re never lost due to market conditions.
  • Guaranteed Lifetime Income: FIA’s are the only retirement savings vehicles that can guarantee a lifetime income that you cannot outlive. Funds in your 401K or IRA can run out due to market conditions, and you can lose out on a main source of retirement income when you need it the most. FIA’s can guarantee you a lifetime income, that can keep up with inflation, and that you cannot outlive. Give us a call (or fill out your information) and we can discuss how that is possible. You can also go to the Illustrations page to see examples how this would work.
  • Tax-Deferred Savings: FIA’s are tax-deferred just like your IRA or 401K. In fact, if you plan on rolling over any funds from any other non-qualified retirement savings, like CD’s or bank accounts, they can have the advantage of growing tax-deferred as well. Unlike IRA’s and 401K’s, annuities do not have maximum contribution limits to take advantage of tax-deferral growth.
  • Less Worry When You Can Handle Worrying Least: Typically, as we age, we can handle stress and worry less. Do you want to worry about market volatility during your retirement years? Do you want to worry about running out of money during retirement? Annuities are the only retirement vehicles that are designed to protect you from downside market risk, and guarantee you a consistent income stream during your retirement than you cannot outlive.
  • Participation Rates or Caps: To make up for not taking any of the hits of down-market years, the market strategies in a FIA cap the upside or credit your account a percentage of the upside (you get to choose which strategy). However, as you can see in the chart below, because you don’t take any of the hits when the markets are down, over the long term you can have interest credited to your account which can be comparable to the underlying market strategy.

Fixed Index Annuities can play an important role in your retirement income needs. Give us a call, or fill out your information in the “Request” box so that we can discuss your specific situation, and how FIA’s can work for you. We can also email you illustrations which show you visually how FIA’s can work for your specific retirement goals and needs.