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Fixed EIA’s Aren’t Looking So Bad Now

Fixed index annuities have come under quite a bit of scrutiny and negative publicity recently–some of which is certainly justified. But the basic benefits of the typical fixed or equity index annuity (a conservative long-term investment whose earnings are tied to the performance of a market index with no downside risk) come to light during difficult financial times such as these. EIA’s, especially those with guaranteed income benefit riders, protect the principal invested, offer a favorable rate of return for income (anywhere between 5%-8% per year) and payments you can’t outlive in retirement.

They can be complicated and some marketers (as opposed to financial planners who have the client’s best interest at heart) make them appear to be more than they are, but maybe they’re not such a bad idea as part of a retirement income plan, especially as one approaches retirement. How many retirees or those anticipating retirement wouldn’t like an investment that provides wealth preservation and income–what a novel idea.

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