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You receive some of the upside and none of the downside. The annuity contract has a formula that decides how much of the gain of an index you receive. You are not directly investing in the index. “You can earn market-like upside without the market downside.” This is a partial truth.An agent might confuse you by discussing payout rates, withdrawal rates, or the income account value. Your rate of return is calculated based on the accumulation value, not the income value. It’s a fictional number that you can’t withdraw a lump sum, transfer out, or live on the interest. The 7-9% refers to an income rider roll-up rate. You don’t earn a guaranteed 7%-9% return when CDs, bonds, and fixed income earn less. “Earn a guaranteed 7-9% returns.” False.Bonus Tip - Watch our video titled " The 7 Biggest Mistakes Consumers Make When Buying An Annuity & How To Avoid Them"ĪNNUITY ADVERTISING TACTICS TO BE AWARE OF.The indexes available for the product are listed below. It’s also a good idea to lock in the indexes at different times. Diversify your index annuity into a variety of indexes. Established indexes are safer and more likely to generate better returns. These fancy new indexes have not been tested in the real world. Be extremely careful with custom or proprietary indexes because you don't know the underlying holdings.We can rank 150+ income riders and show you which products guarantee the most retirement income. If you are looking for the most retirement income, request an income later quote. If you don’t need income later, DO NOT pay for an income rider. The fees are taken out of your account value. Income riders cost real money and lower your principal balance.Book a 15-minute phone call with one of our specialists, and they can help. Uncapped annuities have spreads or participation rates that limit their upside potential. Some index annuities have caps that limit their gains.Know the worst and best-case scenarios because you will likely earn something in the middle. You should also request a proposal for the worst-case scenario. Has a company sent you a proposal that seems “too good to be true?” Hypothetical illustrations are often the best-case scenario.They also extend the term or lower the renewal rates. If a company pays a bonus, they typically take away some of the upside potential by lowering the cap.
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