If you’re looking for a way to protect your retirement savings, you might want to consider an indexed annuity. These contracts offer some of the best protection available against market volatility. But what if you could combine the best features of different indexing methods? In this guide, we’ll show you how to do just that!
Combining Indexing Methods For Maximum Growth Potential
An indexing approach to earn interest in a fixed index annuity is a collection of techniques known as combination indexing methods. Combination methods employ several aspects of total interest rate strategies and some of the elements of yearly interest rate strategies.
Although several combination indexing methods are in use, a relatively popular combination method utilizing a mixture of the following strategies:
- The declared rate strategy: Each year a guaranteed interest rate is declared for the year alone.
- The annual rest strategy: Requires calculation periods that are one year long.
- The multi-year reset strategy: Requires calculation periods that are at least two years long.
A combination of these strategies will:
- Guarantee a return each year (declared rate)
- Consistent returns (annual reset)
- More upside potential (multi-year reset)