Judging but the indexed annuity sales numbers a lot of people are choosing indexed annuities over funds. Why? Good question!
The simple answer is safety and the possibility for market-like returns. Mutual funds can lose value and fixed indexed annuities never go down!
Don't get lost in the high markets of right now.
People tend to forget the down years when the market is up like right now. Mutual funds can go down and will go down when the market goes down. Fixed indexed annuities go up with the market but not down with the market. And even better they have guarantees that can be added.
Imagine a guarantee that grows your income base by 5-7% each year until you start withdrawing money for retirement. Imagine that same guarantee in retirement for the down years. Now imagine the guarantee that pays you 5% of your principal amount each year no matter what the market does. It is guaranteed to pay each year even if your account value goes to zero.
What happens when your mutual fund values get to zero because you have withdrawn all of the money for retirement income? If you answered NOTHING then you are right! In the fixed indexed annuity with the income guarantee you would still get your same income for the rest of your life!
Of course there are details but it is worth looking into. To read more about the differences and a comparison between mutual and fixed indexed annuities read - Are Indexed Annuities or Mutual Funds Better?
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