Looking for a “crash-proof retirement“? This guide will inform you which annuities have the ability to lose money that does not. In addition, this guide will answer the following questions:
- Can you lose money in an annuity?
- Is my money safe in an annuity?
- Has anyone lost money in a fixed annuity?
- What happens to annuities when the market crashes?
- What is the safest type of annuity?
- Are there any safe annuities?
Annuity owners can lose money in a variable annuity or index-linked annuities. However, owners can not lose money in an immediate annuity, fixed annuity, fixed index annuity, deferred income annuity, long-term care annuity, or Medicaid annuity.
Annuity Principal Protection At A Glance
| Variable Annuity | Fixed Index Annuity | Fixed Annuity | Immediate Annuity | Deferred Income Annuity | |
|---|---|---|---|---|---|
| Principal Protection | No | Yes | Yes | Yes | Yes |
| Access To Principal | Yes | Yes | Yes | No | No |
| Control Over Money | Yes | Yes | Yes | No | No |
| Tax-Deferred Growth | Yes | Yes | Yes | No | No |
| Guaranteed Growth | No | Yes | Yes | No | No |
| Guaranteed Income | Yes | Yes | Yes | Yes | Yes |
| Inflation Protection | Yes | Yes | No | Yes | Yes |
| Death Benefit | Yes | Yes | Yes | Yes/No | Yes/No |
| Long-Term Care Help | Yes | Yes | Yes | No | No |
You can lose money in a Variable Annuity.
Variable annuities are investment-based retirement plans. You are investing in stocks, bonds, mutual funds, etc. If the investment performance is negative, you will lose money.
You can lose money in an Index-Linked Annuity (Buffer Annuity).
The new index-linked annuities (not confused with fixed index annuities) offer the opportunity to lose money but with limitations. For example, most contracts have a buffer or floor that limits an individual’s loss each year.
You can not lose money in Fixed Annuities.
Fixed annuities do not participate in any index or market performance but offer a fixed interest rate similar to a CD.
You can not lose money in Fixed Index Annuities.
Another insurance-based annuity allows owners to grow their retirement savings based on the positive movement of a particular stock or bond index while protecting against a stock market crash. Conversely, if the index performance is negative, the annuity’s value will stay at the same value of the previous year (minus fees).
You can not lose money in Income Annuities.
Immediate and Deferred Income Annuities are income annuities that do not participate in any accumulation but rather a conversion of money into a stream of paychecks, either now or in the future.
Request Annuity Quotes
Why you can trust The Annuity Expert
At The Annuity Expert, we strive to help you make confident financial decisions regarding annuities. Content provided is created by an independent licensed financial professional.
The Annuity Expert is an online insurance agency that provides the widest variety of annuities in the United States. When you buy an annuity directly from us, we receive a predetermined commission from the insurance company (not you). While your annuity is active, clients are not charged any servicing or management fees. Learn more.
I’m a licensed financial professional. I’ve sold annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.
My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you.