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Fixed Indexed Annuities

If you want to increase your tax-deferred savings for retirement, consider a fixed indexed annuity. Compare Annuities.


A fixed indexed annuity is a type of fixed annuity that provides protection against market loss with the potential for tax-deferred growth. It may be appropriate for you if:

  • You are planning for retirement and seeking an opportunity for your money to grow tax-free while you are guaranteed not to lose your initial investment.
  • You expect to be in a lower income tax bracket after you retire.
  • You are in your 50s or 60s and preparing for retirement.

How it works

Your investment is tied to a specific index or a selection of indices. If the index return is positive, you will receive a portion of that return up to a specific percentage, called a cap. Keep in mind, you are not directly invested in an index so your savings are not exposed to downside market loss. Rather, the index’s performance is used to determine how much interest, if any, will be credited to your contract in a given period.

In the event that the index has a negative performance, your account will not decrease due to market loss.

Key benefits

  • Return of principal with opportunity for growth.
  • Earnings are tax-deferred.


  • Typically no front-end fees — all of your money is invested.
  • Contingent deferred sales charge (CDSC) that declines to zero over a set period of time. Fees may apply if optional riders are elected.


  • May include a CDSC for early withdrawal.
  • Optional income or death benefits can potentially be added for an additional cost to provide additional guarantees.
  • Potential tax penalties for withdrawals before age 59½.
  • Consult your tax advisor about other possible tax implications.

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Contingent deferred sales charge (CDSC)

If you withdraw money from an annuity contract or surrender the contract within a certain period of time after investing, the insurance company may assess a contingent deferred sales charge (CDSC). Usually, the CDSC is a percentage of the purchase payment withdrawn, and it declines gradually over the CDSC period.

For example, a seven year CDSC may decline over the first seven years of your contract: 7%, 6%, 5%, 4%, 3%, 2%, 1%, 0%.