Working with Bothfeld Financial opens a range of options to manage your money and build a nest egg to support your retirement. One of the options is a fixed index annuity which is a contract between you and an insurance company that may help you reach your long-term financial goals. In exchange for your premium payment, the insurance company provides you income, either starting immediately or at some time in the future.
How does it work?
Fixed index annuities have two phases. First,while you are still working, there’s an accumulation phase, during which you let your money earn interest. This is followed by a distribution or payout phase, during which you receive money from your annuity to fund your retirement.
A fixed index annuity guarantees you will receive at least the minimum guaranteed interest credited to the contract. All of these guarantees are backed by the claims-paying ability of the issuing company. Bothfeld Financial works with several insurance companies offering these products and can advise you the best company to work.
With a fixed index annuity, you defer paying taxes on your contract’s interest until you receive money from the contract. Tax-deferred interest means the money in your contract can grow faster.
With a fixed index annuity our principal and bonus are never subject to market index risk. A downturn in market index(es) cannot reduce your contract values.
Phase one: accumulation
The accumulation phase begins as soon as you purchase your annuity. Your annuity can earn a fixed rate of interest that is guaranteed by the insurance company or an interest rate based on the growth of an external index.
Phase two: distribution
The distribution phase of a fixed index annuity begins when you choose to receive income payments. You can always take income payments in the form of scheduled annuitization payments over a period of time, including your lifetime. And many fixed index annuities allow you to take income withdrawals as an alternative to annuitization & payments. Either way, you can choose from several different payout options based on your personal needs, including options for lifetime income, guaranteed.