Indexed Annuities for Wisconsin Retirement Planning
Looking for a way to grow your retirement savings without exposing it to market losses? Indexed annuities offer a unique balance: the opportunity to earn interest tied to a market index—like the S&P 500—without risking your principal when the market goes down.
At Goodman Family Insurance, we help Wisconsin residents—from Brookfield to Madison—understand how fixed indexed annuities can fit into their long-term retirement plans. Whether you're approaching retirement or want to protect what you’ve already built, these products offer tax-deferred growth with built-in downside protection.
How Indexed Annuities Work
A fixed indexed annuity (FIA) is an insurance product that credits interest based on the performance of a market index, but with a floor of 0%. That means:
- If the index goes up, you earn a portion of the gain (subject to a cap or participation rate).
- If the index goes down, you lose nothing—your account simply earns zero that period.
Example:
If the S&P 500 rises 10% and your annuity has a 5% cap, you earn 5% for that crediting period. If the index drops 10%, your account is credited 0%—but your original principal stays intact.
Key Features of Indexed Annuities
Principal Protection
Your investment won’t lose value due to market downturns.
Tax-Deferred Growth
Earnings accumulate without current taxation, helping compound your retirement savings.
Growth Potential
Opportunity to earn more than a traditional fixed annuity when the market performs well.
Lifetime Income Options
Some contracts offer riders that convert your account into guaranteed income later.
No Direct Market Exposure
You’re not actually invested in the index, just using it as a benchmark for interest.
Things to Know Before You Buy
Indexed annuities are best suited for long-term retirement strategies. Like any financial product, they have limitations:
Caps or Participation Rates
These limit how much of the market gain you receive.
Surrender Periods
You may face penalties if you withdraw funds early (often within 5–10 years).
Fees
Basic FIAs may have no explicit fees, but income or enhanced benefit riders might carry a charge.
That’s why we walk you through the pros and cons to make sure this fits your needs and timeline.
Who Can Benefit from an Indexed Annuity?
These annuities are popular among:
- Pre-retirees and recent retirees who want market-linked growth without market risk
- Conservative savers seeking a higher alternative to CDs or fixed annuities
- People concerned about outliving their money, looking for a way to lock in income
If you’re nearing retirement in Waukesha, considering early retirement in Milwaukee, or building a financial plan in Brookfield, indexed annuities may offer a reliable middle ground.
Common Questions About Fixed Indexed Annuities
Can I lose money in an indexed annuity?
You won't lose money due to market declines. However, surrender charges, early withdrawals, or added riders could reduce your account value.
How long should I plan to keep an indexed annuity?
Most contracts have surrender periods ranging from 5 to 10 years. It’s a long-term product—not ideal for short-term savings.
Do indexed annuities have fees?
Base products often don’t have explicit fees, but optional benefits—like guaranteed income riders—may come at a cost.
How is the interest credited?
Interest is credited based on the index’s performance over a set period, subject to your contract’s cap or participation rate.
Can I add more money later?
Most indexed annuities are single-premium, meaning you make one deposit up front. Some allow additional contributions in the first few years.
Plan for a Steady, Worry-Free Retirement
If market volatility has you rethinking your savings strategy, an indexed annuity could offer the right combination of growth potential and stability. Let’s review current rates and explore how this could fit into your Wisconsin retirement plan.
Reach out for a no-pressure consultation—we’ll help you weigh your options and build a plan that makes sense for your future.