Displaying items by tag: index annuities

A surge in annuity sales over the past few years has been driven by retiring baby boomers and elevated interest rates, with total sales surpassing $1.1 trillion between 2022 and 2024. Fixed annuities, which function similarly to certificates of deposit but typically offer higher returns, have been particularly popular, with some rates reaching 5.85% in early 2025. 

However, as interest rates begin to decline, the appeal of these straightforward products may diminish, prompting investors to explore alternatives like fixed-index annuities. These annuities link returns to market performance while guaranteeing principal protection, making them an attractive option in uncertain economic conditions. 

Despite their benefits, fixed-index annuities come with complexities, including caps on returns and intricate contract terms that require careful scrutiny. As the market evolves, investors should prioritize transparency and fully understand their options before committing to an annuity in 2025.

Finsum: With the potential of interest rates staying flat we could see more investment in index annuities in 2025. 

Annuities offer a dependable source of income in retirement, primarily provided by life insurance companies. With various annuity products available, the challenge is identifying the most reputable providers that align with your retirement needs. 

Bankrate guides this process by evaluating companies on customer satisfaction, financial strength, product diversity, and other key criteria. Their analysis includes top providers like Allianz Life, known for its wide selection of fixed index annuities, and Prudential, offering diverse annuity types with flexible options. 

Pacific Life, another strong contender, stands out for its financial stability and customer service, despite higher minimum premiums. Choosing the right annuity provider involves weighing factors like fees, accessibility, and product offerings to match individual retirement goals.

Finsum: Index annuities are an increasingly important vehicle for those nearing retirement as inflation has been such an important investment factor in recent years. 

Rising interest in commodities like gold, oil, and grains, fueled by concerns over inflation and climate change, is impacting the design of fixed indexed annuities and registered index-linked annuities. This shift appeals to clients seeking hedges against inflation and additional asset diversification. 

While traditional indices like the S&P 500 dominate annuity allocation options, commodity indexes are emerging as viable alternatives, offering potential returns between 3% and 5.5% annually. Index exposure varies, with some annuities offering direct access to single commodities, like gold, while others provide diversified commodity index options. 

The inclusion of these indexes signals a broader trend toward more diversified and defensive investment strategies within annuity products, catering to clients' evolving needs in a changing economic landscape.

Finsum: These annuities could provide a natural way to get industry exposure and hedge against key issues like inflation.

While you’ll find salespeople peddling the pros of annuities littered across the industry and their detractors in equal force, but in reality, index annuities, under specific circumstances, can be a viable option for a steady retirement income. Here are three top providers:

• MassMutual stands out as the top annuity provider with high ratings and a broad range of annuity types, making it a reliable choice for straightforward annuity products.

• Athene, known for its no-charge income and death benefit riders, offers a variety of annuities, including fixed and index-based options, suitable for those seeking guaranteed retirement income. 

• Fidelity Investments, partnering with several insurance companies, provides a wide range of annuities and offers the Fidelity Personal Retirement Annuity, notable for its low fees and no surrender charges. 

Each of these companies caters to different investor needs, from those desiring straightforward solutions to those looking for comprehensive investment and annuity integration.

Finsum: Index annuities in particular can be a goldilocks solution to income investments during higher volatility. 

Lincoln Financial Group unveils the 1 Year S&P 500 Dual Trigger account, a pioneering addition to fixed-indexed annuities, offering market adaptability and full downside protection. This innovative option addresses consumer concerns about inflation, investment losses, and market volatility, catering to the 61% of consumers seeking growth and protection in their investments. 

Senior vice president of Annuity Product Management, Daniel Herr, anticipates robust sales approaching $100 billion by 2025, with the introduction of the 1 Year S&P 500 10% Daily Risk Control Trigger expanding growth opportunities.

As millions of Americans transition into retirement annually, Lincoln Financial remains committed to safeguarding their financial futures through diverse investment strategies. Senior vice president of Retirement Solutions Distribution, Tim Seifert, emphasizes the importance of new crediting strategies in empowering retirement planning. 

Finsum: Index annuity offerings offer a great alternative to fixed income for those in or nearing retirement.