Even though it happened more than a decade ago, few investors will ever forget hearing that “too big to fail” Lehman Brothers had collapsed. In the U.S., the S&P lost nearly half of its value during the recession, while millions of people lost their jobs and their homes. And although there have been some safeguards put in place since 2008 that could help to prevent a sequel, nothing is guaranteed.
So, before you dive into (or back into) the market with some or (hopefully not) all of your retirement savings, ask yourself this one question:
Do you really want to re-live 2008?
You Don’t Have to Choose Between Safety or Growth
If you’re on the home stretch with preparing for retirement, chances are that you want to keep your principal safe, while at the same time, squeezing out every ounce of growth necessary to boost your savings.
Unfortunately, though, keeping your money safe typically requires a tradeoff of extremely low rates of return – and conversely, going for more growth entails risk…risk of loss that you don’t likely have time to make up for if your bet goes sour.
If you see yourself in this picture, take a deep breath and read the next sentence very slowly:
You don’t have to compromise!
While the traditional “equities or fixed rate” method of investing may have worked in the past, things have changed dramatically – and that requires more flexible financing options that can still provide positive benefits, no matter which way the market decided to turn.
Products like the fixed index annuity.
With a fixed index annuity, the return is based in large part on the performance of an underlying market index, such as the S&P 500. When the index performs well, the annuity is credited with a positive return – usually up to a set cap, or maximum.
But, if the underlying index performs poorly in a given year, your account doesn’t take the brunt of the downturn, but rather it is simply credited with a 0%…which isn’t too bad, considering that investing directly in the index could cause a substantial loss.
With no losses to make up for, when the index turns around and rights itself again, there is no need to get back to even – and the account is able to continue building upon its previous gains.
Narrowing Down Which Safety Net is Right for You
Although a fixed index annuity may sound like a viable solution for those who want both safety and growth, these financial vehicles are not all exactly the same – and because of that, you could find that if you dive in head first without a good understanding of what you’re committing to, it could be an expensive mistake.
With that in mind, doing a bit of research can help you to better ensure that you’re heading in the right direction. (After all, wouldn’t you do at least some homework before making any type of high-ticket purchase?)
That’s where the Annuity Gator comes in!
At Annuity Gator, we provide unbiased annuity advice, without all of the technical jargon. We know that annuities can be complicated products. But at the same time, we don’t want consumers to be so overwhelmed that they pass up financial options that could be right for them.
If an annuity seems like it could be the right fit for you – or even if you just have some additional questions about annuities – feel free to reach out to us using our secure contact form and talk with one of our highly trained annuity experts.