Why Buy an Equity Income Annuity?

Find a way to supplement your income after you retire when you invest in an annuity. There are a variety of annuity options available to you, including an equity income annuity. The equity income annuity is a great way to increase your wealth while taking full advantage of stock market performance simultaneously. When you want to feel more certain about your financial future after retirement, an equity income annuity is an excellent investment strategy.

An equity income annuity is different from its annuity counterparts because it is closely tied to a specific equity market, often the S&P 500. By pairing itself with this market, the annuity will offer additional interest to its investors based on the performance of the agreed-upon market. For example, if the annuity is tied to the S&P 500 and this market performs well quarter after quarter, the annuity will enjoy a higher rate of interest each quarter. The interest will be put into the initial investment and since the annuity is tax-deferred, the investment will continue to grow at an aggressive rate. This additional interest will compound and expand the investor’s initial principle over time.

But what if the market struggles? Can the investor lose their investment during these lean times in the marketplace? Not at all. In fact, every equity annuity guarantees a minimum interest rate so that even when the market is dropping significantly, the annuity investment will still see a gain, albeit a slower growth than if the market was performing better. Regardless, the annuity investment continues to grow over this time. Many investors explain the equity annuity by saying it’s like getting all the benefits of strong market performance without having to struggle during the times when performance drops. You can have your cake and eat it too.

Equity income annuities have gained in popularity over the years from baby boomers looking for ways to increase their retirement funds and budget during the years after they retire. The equity annuity can provide stability and certain income over these years, extending to cover a spouse and even protect an heir years after the initial investor has passed away. These benefits are incredibly attractive to individuals looking for a conservative, sure-fire way to invest their savings in way that makes sense to retirees and their families alike.

Compare interest rates among a number of different insurance firms to find the equity income annuity that will make a financial improvement on your retirement budgeting. Use the annuity as a foundation for your funds after retirement and feel more confident about your financial landscape.

Not sure which insurance company you can trust? Take a look at Steven’s Annuity Ratings guide and find a rock-solid annuity provider. Not sure how much to invest to reach your dream retirement? Take a look at Steven’s Annuity Calculator page to help determine premiums.

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