Fixed Index Annuities can be a Perfect Fit for Women
Saturday, February 22nd, 2014 and is filed under Financial News, Financial Planning Blogs, Insurance-based products, Investing for Women - Did You Know?, Products & Investments, Rebranding Annuities, Saving for Retirement
There’s no question that finance is traditionally a male-dominated industry. Though the number of female financial professionals has increased dramatically over the last several years, there is a lingering sense among many female consumers that they are not part of the club when it comes to fully understanding and controlling their finances.
A recent study conducted by Prudential on women’s financial attitudes and behaviors highlights several areas in which women feel they are not financially empowered. In fact, the study reports as few as 22% of women feel well-qualified to make financial decisions, and the majority of women are not working with a financial advisor.
The main goal of Women, Money and Power is to put women in the driver’s seat when it comes to their money. By becoming educated and empowered on financial issues, women can cut through intimidating jargon and fast-talking sales pitches to make sound decisions based on facts – not emotions.
It is common for women to feel that they are behind in financial planning, especially when it comes to retirement accounts. A Fixed Index Annuity can be a strong solution for women who are looking for a safe and straightforward retirement plan.
(Listen in on the Women, Money & Power radio show to learn more.)
First of all, when you purchase a Fixed Index Annuity you do not pay any loads or commissions. In fact, you will only pay fees if you choose certain add-ons or riders, and those fees would be clearly disclosed up front. This means more of your money stays in your contract working for you, as opposed to paying a broker to buy and sell assets in a brokerage account.
Secondly, FIAs offer the opportunity to earn returns based on good market conditions, but you cannot lose money if the market takes a downturn. You do not have to be able to predict market performance, understand indicators, or stay on top of trends to protect and grow your hard-earned retirement money.
Perhaps most importantly, Fixed Index Annuities provide more income than traditional brokerage models. Most financial advisors will say you can safely withdraw 3% per year from your brokerage account and not run out of money in retirement. The problem is, if the market takes a drastic downturn like we saw in 2007-2008, you could be looking at a significantly lower annual income and a major lifestyle change if you’re relying on a brokerage account to fund your retirement.
However, Fixed Index Annuities typically have annual income payout rates ranging from 5.0% to 6.5%, and your annual income is contractually guaranteed by the insurance company for as long as you live – even if the market crashes. Plus, some FIA plans allow your income to go up from year to year as the market grows. This means your income not only starts out higher, it can also keep up with inflation.
Women who are facing the challenge of taking charge of their finances should seek out financial professionals who are willing to take the time to give clear explanations of their options. When the facts are presented in black and white, it’s easy to see that Fixed Index Annuities provide superior levels of both safety and income in retirement. Get the facts, and find out how an FIA might fit into your financial future.