Consider a Fixed Indexed Annuity Instead of a CD

Brendon Kelly   |   December 2022   |   1-minute read

The Story

Agness is conservative and has $100,000 at the bank in a CD. In this low-interest-rate environment, Agness was just offered a 1% interest rate on her CD for the next five years.

The Problem

Agness believes that the 1% interest rate seems low and consults with her financial advisor. She does not want to take on any risk to achieve potentially higher returns.

Client Profile

  • Agness age 78
  • Has rainy day funds saved for emergencies only
  • Is looking for guarantees, not risk

How it Works

Agness purchases a five-year fixed indexed annuity. The product she purchases has a 2% SIMPLE minimum interest credit annually. At the end of five years, Agness is GUARANTEED a “worst” case result of receiving $110,000.

Why Fixed Indexed Annuity?

The fixed indexed annuity has given Agness a guaranteed minimum contract value that exceeds the 1% offered by her bank. In addition, Agness has four crediting strategies in which to allocate her funds, with interest being credited based on annual index performance (subject to caps, spreads and participation rates) without having any risk to her principal.

The Result

Agness has peace of mind knowing that her funds are in a safe, conservative product with guarantees that are higher than her bank. She also has upside potential based on the various crediting strategies, tax deferral, a nursing home waiver and withdrawal privileges.

Brendon-Kelly-Ash-Brokerage-Retirement
About the Author

Retirement is one of the most important financial events in a person’s life. As SVP, Retirement, Brendon Kelley facilitates our team to make planning for retirement as straightforward as possible. From having the initial conversation to handling licensing and submitting applications, Brendon’s committed to keeping the annuity process running smoothly.