How a Fixed Index Annuity Can Protect Your Retirement Savings as You Near Retirement
- Barry Group
- Apr 7
- 4 min read
If you're between the ages of 59½ and 65, this may be one of the most financially vulnerable stages of your life. You’re likely eligible to make penalty-free withdrawals from retirement accounts like 401(k)s and IRAs—but many nearing retirement have already taken hits to their savings due to ongoing market instability.
As inflation, political uncertainty, and economic volatility persist, more retirees and pre-retirees are asking the same question:
“How can I protect what’s left and still grow my retirement without risking more losses?”
Enter the Fixed Index Annuity (FIA)—a tool designed to offer guaranteed protection, tax-deferred growth, and lifetime income.
What Is a Fixed Index Annuity (FIA)?
A Fixed Index Annuity is an insurance product designed to protect your retirement savings from market loss while still giving you the opportunity to earn interest based on the performance of a market index, such as the S&P 500.
Key Features:
✅ Principal protection – Your money will never go down due to market losses.
📈 Growth potential – Your money can grow when the market goes up, typically earning 4–7% average annual growth depending on the product and index performance.
🧾 Tax-deferred – You don’t pay taxes until you withdraw.
💵 Lifetime income options – Turn your savings into a pension-like stream of guaranteed income for life.
👨👩👧👦 Beneficiary protection – Unused funds pass to your heirs, bypassing probate.
According to the Insured Retirement Institute, annuity sales hit an all-time high in recent years as more Americans seek secure income options amidst rising economic uncertainty.
“I Lost Money in My 401(k)—How Can an FIA Help?”
Many Americans watched their 401(k)s and IRAs lose tens or even hundreds of thousands during recent market downturns. If you’re within 5–7 years of retirement, you simply don’t have the time to wait for a full recovery—and another downturn could devastate your plans entirely.
Unlike your 401(k), which is typically invested in mutual funds and exposed to market fluctuations, an FIA offers:
Zero market risk: If the market drops, your principal stays the same. You’ll never lose what you’ve already earned.
Lock in gains: Interest credits are locked in annually, meaning once you earn them, you can’t lose them—even if the market tanks the next year.
📉 Example: If your FIA earns 6% this year and the market crashes the next, your balance remains intact—with no losses. That’s something no mutual fund or ETF can promise.
What Are the Fees?
FIA products are often misunderstood when it comes to fees. Here’s the breakdown:
Basic FIA contracts: Generally have no fees.
Income Riders (optional): May carry fees of 0.95% to 1.25% annually, but provide guaranteed lifetime income and other enhancements.
Surrender charges: Only apply if you withdraw more than the penalty-free amount (usually 10%) during the surrender period (typically 7–10 years).
When structured correctly with the help of a licensed advisor, fees are transparent and manageable—especially when weighed against the risk of major market losses in other vehicles.
How Is an FIA Different from Other Retirement Accounts?
Feature | 401(k) / IRA / Mutual Fund | Money Market Account | Fixed Index Annuity |
Market Loss Risk | High | Low | None |
Average Growth | Varies (7% historically) | <1% | 4–7% avg |
Tax-Deferred | Yes | No | Yes |
Principal Protection | No | Yes | Yes |
Lifetime Income Option | No | No | Yes |
Guaranteed Interest | No | Low fixed rate | Yes (indexed) |
Probate-Free Beneficiary Payout | No | Yes | Yes |
Bottom line: An FIA gives you growth with no downside, unlike stocks, mutual funds, or even some bond funds that can (and do) lose value.
How an FIA Can Help You Prepare for Retirement
If you’re nearing retirement, you need stability, predictability, and security. An FIA provides:
✅ A safe place to roll over your retirement accounts once you're 59½—without taxes or penalties.
✅ Consistent annual growth, so you don’t just “sit on cash” with no returns.
✅ Protection from future market crashes.
✅ The ability to convert savings into a paycheck for life—even if you live into your 90s.
✅ An easy way to leave a tax-advantaged inheritance.
Take Control of Your Retirement Future
You’ve worked too hard to lose more money.
If you’re 59½ to 65 and your 401(k) or IRA has taken a hit—or you’re simply ready to shift from risk to security—a Fixed Index Annuity could be exactly what your retirement plan needs.
Our elite advisors at Barry Group & Associates will walk you through:
How to roll over your 401(k) or IRA safely
What your income options look like in retirement
Which FIA strategies make sense based on your age and goals
📞 Call: 866-540-9122
🌐 Visit: www.barrygroup.net
Sources:
Insured Retirement Institute: https://www.irionline.org
National Association for Fixed Annuities (NAFA)
Allianz Life: 2024 FIA Consumer Confidence Report
IRS Publication 590-B: IRA Distributions and 59½ Withdrawal Rule
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