Are Indexed Annuities A Good Investment?

Shawn Plummer

CEO, The Annuity Expert

Reasons Indexed Annuities Are a Good Investment

1. Protection Against Market Downturns

Indexed annuities offer protection against losses during market downturns. Your principal investment is typically safeguarded, meaning you won’t lose your initial investment due to market declines.

2. Potential for Higher Returns

These annuities provide the potential for higher returns compared to traditional fixed annuities. They are linked to a market index, like the S&P 500, allowing for growth opportunities based on market performance.

3. Tax-Deferred Growth

The growth of your investment in an indexed annuity is tax-deferred. You don’t pay taxes on the interest earned until you make withdrawals, allowing your investment to grow more efficiently over time.

4. Guaranteed Minimum Return

Most indexed annuities come with a guaranteed minimum return. Even if the market index performs poorly, you are assured of receiving a minimum interest rate on your investment.

5. Customizable Investment Options

You can often customize your investment based on your risk tolerance. This includes choosing the market index to track and selecting the level of participation in the index’s gains.

6. Lifetime Income Option

Indexed annuities can provide a steady, guaranteed income stream for life. This feature is particularly valuable for retirement planning, ensuring a consistent income regardless of market conditions.

7. Death Benefit

If the annuity holder passes away, a death benefit is typically paid to the beneficiaries. This feature provides financial security and peace of mind for the annuity holder’s family.

8. Inflation Protection (Optional)

Some indexed annuities offer riders that provide inflation protection, adjusting your annuity payments to keep pace with inflation.


Indexed annuities are a beneficial investment for those seeking market-linked growth potential while protecting their principal investment. They offer tax advantages, customizable options, and guarantees that make them an attractive option, especially for retirement planning. Their ability to provide a steady income and a death benefit adds to their appeal. Understanding these advantages helps in making informed investment decisions.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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