Annuities & retirement
Indexed annuities
In plain EnglishGrowth linked to a market index like the S&P 500, with guarantees that protect your savings when the index falls.
What it is
A fixed indexed annuity credits interest based on the performance of a market index, such as the S&P 500 — so you have more growth potential than a fixed annuity. You’re never invested in stocks directly.
Minimum guarantees protect you on the way down: when the index falls, your value won’t decline because of it. In those years you simply aren’t credited interest, and you keep what you’ve already earned. Growth is tax-deferred, and when you’re ready you can take withdrawals or turn your savings into income for life.
How it works
Step by step.
- Put your money inOne deposit or ongoing payments — often a rollover from a 401(k), an IRA, or savings.
- Choose how it growsPick from index-linked options (and usually a fixed-rate option) offered by the annuity.
- Earn when the index risesInterest is credited based on the index’s growth, up to the annuity’s limits. When the index falls, your value is protected.
- Turn it into incomeWithdrawals, a lump sum, or a paycheck for life.
The honest version
What’s good, and what to watch.
Every product has trade-offs. We’d rather you hear them from us now than discover them later.
What we like
- More earnings potential than a fixed annuity
- Your value won’t decline when the index falls
- No direct investment in stocks
- Tax-deferred growth
- Lifetime income options
What to watch
- In years the index is down, no interest is credited
- Surrender charges if you take out more than allowed in the first years
- Withdrawals before age 59½ may carry a 10% IRS penalty
Frequently asked questions
Straight answers.
Can I lose money when the market drops?
Not because of the drop. Minimum guarantees protect your value from index declines — in a down year you’re simply credited no interest.
Am I invested in the stock market?
No. The index is used to calculate your interest; your money isn’t invested in stocks.
How is it different from an IUL?
An indexed annuity is built for growing savings and creating retirement income. An IUL is life insurance first, with a death benefit for your family and cash value that grows alongside it.
Often paired with
Related coverage.
Fixed annuities
A set interest rate for a set number of years, with a guaranteed minimum — steady growth with no market risk.
Learn more →Annuities & retirement income
Protect savings from market drops and turn them into income you can’t outlive.
Learn more →Indexed universal life (IUL)
Lifelong protection plus cash value linked to a market index — with a guaranteed floor when the index drops.
Learn more →General information, not tax or legal advice. Features, availability and rules vary by insurance company, product and state — we’ll walk you through the details of any policy before you apply.
Is this right for you?
Tell us a little about your family and goals. We’ll compare your options side by side — no pressure, no obligation.