Guide to Buffer Annuities and Registered Index-Linked Annuities (RILAs)

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding Buffer Annuities and RILAs

Annuities are financial products designed to provide a steady income stream, often used for retirement planning. Buffer Annuities and Registered Index-Linked Annuities (RILAs) are essentially the same type of annuity, known under different names. This guide will explore their features, benefits, and potential drawbacks and compare them with Fixed Index Annuities (FIAs).

What are Buffer Annuities and RILAs?

Buffer annuities, also known as Registered Index-Linked Annuities (RILAs), are a type of indexed annuity that offers growth opportunities based on market index performance. They come with a unique protective feature called the “buffer,” which absorbs a specified percentage of losses, typically around 10%, shielding investments from minor market downturns.

Key Features

  • Market-Linked Growth: Returns are tied to the performance of a specific market index.
  • Downside Protection: The buffer absorbs a predetermined percentage of losses, offering a safety net in volatile markets.
  • Growth Cap: There is usually a cap on the maximum return you can earn, limiting potential upside.


  • Protection Against Volatility: Buffer annuities offer a balance between growth and protection, making them suitable for risk-averse investors.
  • Potential for Growth: While providing some downside protection, buffer annuities still allow for market-linked growth.
  • Tax-Deferred Growth: Earnings grow tax-deferred until withdrawal, potentially enhancing growth over time.


  • Limited Returns: The growth cap can limit your potential earnings compared to direct market investments.
  • Exposure to Significant Losses: Losses beyond the buffer are still your responsibility.
  • Surrender Charges: Early withdrawals may incur significant penalties.

Buffer annuities, or RILAs, are ideal for investors seeking moderate growth with some protection against market fluctuations.

Comparing Buffer Annuities (RILAs) and Fixed Index Annuities (FIAs)

Fixed Index Annuities (FIAs)

FIAs are another type of annuity that offers growth linked to a market index but with full protection against market losses.

Key Features

  • Market-Linked Growth: Like RILAs, FIAs are tied to the performance of a market index.
  • Guaranteed Principal: FIAs protect your principal investment from any market losses.
  • Growth Cap: FIAs also have a cap on potential returns.

Pros and Cons

Buffer Annuities (RILAs)


  • Moderate growth potential linked to market performance.
  • Some downside protection through the buffer.
  • Tax-deferred growth potential.


  • Exposure to losses beyond the buffer.
  • Limited returns due to growth caps.
  • Potential surrender charges for early withdrawals.

Fixed Index Annuities (FIAs)


  • Full protection of principal investment.
  • Market-linked growth potential.
  • Tax-deferred growth.


  • Limited upside due to growth caps.
  • Lower growth potential compared to direct market investments.
  • Surrender charges for early withdrawals.
Registered Index-Linked Annuity

How We Can Help

At The Annuity Expert, we understand the challenges you face in securing a stable and prosperous retirement. With over 15 years of experience as an insurance agency, annuity broker, and retirement planner, we are dedicated to finding the best solutions at the lowest costs. We believe in providing personalized advice that aligns with your financial goals, ensuring you feel valued and understood throughout your journey.

Our expertise lies in offering tailored financial products that meet your unique needs. Whether you seek growth opportunities with some level of protection or full principal protection, we have the right solutions for you. We recognize that the core problem is balancing growth potential with risk management, and we are here to address this by offering products like Buffer Annuities and Fixed Index Annuities (FIAs).

Rila Vs Indexed Annuity

What We Recommend

Step 1: Initial Consultation

Your journey begins with a free consultation where we understand your financial goals and risk tolerance. During this step, we gather information about your current financial situation and future objectives. The main benefit is receiving a tailored investment strategy that aligns with your retirement goals.

Step 2: Personalized Plan Development

Based on the initial consultation, we will create a customized plan that includes the best annuity options for you, such as buffer annuities or FIAs. We explain the features and benefits of each product, ensuring you make informed decisions. The main benefit here is a clear, actionable plan designed to maximize your retirement savings while managing risks effectively.

Step 3: Implementation and Ongoing Support

We assist you in implementing your personalized plan and provide ongoing support to ensure your investments are performing as expected. This includes regular reviews and adjustments to your plan as needed. The main benefit is continuous monitoring and adjustment of your investment strategy, ensuring it remains aligned with your evolving financial goals.

Features and Benefits

  • Personalized Advice: Tailored investment strategies that align with your unique financial goals.
  • Market-Linked Growth: Potential for higher returns through market performance.
  • Downside Protection: Safety nets to shield your investments from minor market downturns.
  • Tax-Deferred Growth: Enhancing your investments by deferring taxes until withdrawal.
  • Ongoing Support: Continuous monitoring and adjustments to your plan to keep it on track.

Common Objections and Our Arguments

  • “I don’t understand these products.”: We provide clear, easy-to-understand explanations and ongoing support.
  • “I’m worried about fees and charges.”: We offer competitive rates and fully disclose all costs upfront.
  • “I’m not sure about the market risks.”: Our products offer protection features like buffers and growth caps to manage risks.

Neglecting to work with us could mean missing out on optimized growth opportunities and potential tax benefits, leading to a less secure retirement. On the other hand, partnering with us ensures you have a robust, personalized strategy in place, giving you peace of mind and financial security.

Take the first step towards a secure financial future. Contact us today for free advice or a personalized quote. Let us help you achieve your retirement goals with confidence.

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Frequently Asked Questions

What is the difference between an FIA and a RILA?

Both fixed index and registered indexed linked annuities earn interest based on the performance of an underlying index. However, a fixed index annuity offers a guaranteed minimum interest rate, while a RILA does not. As a result, you can lose money in a RILA but not with a fixed index annuity.

When were registered index-linked annuities created?

RILA is a relatively new product, with the first being introduced only a few years ago. On the other hand, fixed index annuities have been around for 20+ years.

Are equity-indexed annuities registered investment products?

Equity-indexed annuities (EIAs) are insurance products, regulated by state insurance departments, not registered investment products regulated by the SEC or FINRA. They provide a guaranteed minimum rate of return with the opportunity to participate in stock market gains while protecting against losses.

What is an indexed variable annuity?

An indexed variable annuity, also known as a RILA (Registered Index-Linked Annuity), combines the features of variable and indexed annuities.

Are registered index-linked annuities safe?

Registered index-linked annuities can offer some safety features like principal protection but still carry risks. Market downturns can limit returns, and complex terms may obscure understanding. Assessing safety involves understanding terms, fees, and potential market exposure. Consult financial professionals for personalized advice tailored to your risk tolerance and goals.

Are registered index-linked annuities a good investment?

Registered index-linked annuities offer potential market-linked returns with downside protection, appealing to risk-averse investors seeking growth. However, they often come with complex terms, caps on returns, and higher fees. Assess individual goals and risk tolerance and understand product details before considering them as an investment option.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, 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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