How Do Fixed Index Annuities Protect Your Investment?

Fixed index annuities are a type of investment that allows you to easily plan for your retirement. With this type of investment, your money is going to be protected throughout the process. Here are the basics of how fixed index annuities protect your investment.

Equity Indexed

This type of investment is also known as an equity indexed annuity. With this type of security, you are going to be able to tie your returns to a specific financial index such as the S&P 500. This allows you to gain access to the market and potentially increase your returns.

Protection

While a fixed index annuity allows you to gain exposure to the market, using one is not like investing in an index fund. With this type of investment, you are going to be able to benefit from a minimum return on investment. Most of these funds have a minimum that you can earn even if the financial index does not perform well. For example, if the financial index returns only 1 percent over the year, you might still earn a minimum of 3 percent from the annuity provider. This provides you with some peace of mind even if the stock market is not doing well.

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