Derrick Loflin

Loflin Wealth

Fixed Indexed Annuities And The Road Analogy

Navigating through retirement involves transitioning from an investment mindset focused on accumulation to one of distribution. The conventional wisdom of high-risk, high-reward strategies that "worked" during your earning years could lead to dire consequences when drawing down your assets. It's a little-known fact that traditional investment methods can fail 68% of the time during retirement, often due to a phenomenon we can refer to as "double or triple dipping": withdrawing funds while experiencing market losses and paying management fees. So, what's the alternative? Enter the Fixed Index Annuity (FIA). It promises a secure retirement and the peace of mind of knowing you won't outlive your savings.

A Different Approach to Retirement Planning

Imagine retirement as a journey on a four-lane highway. The FIA serves as this highway, where the foundational bedrock is the principle of "Zero is my Hero." This means your portfolio never experiences a negative return. In FIA, one lane of traffic represents the 'index or principal deposit value,' protected by metaphorical guardrails that ensure you'll never lose your principal, even during market downturns.

How FIAs Work

In a FIA, the index (such as the S&P 500) acts as a signpost indicating the speed limit or, in financial terms, the rate of return. However, it's essential to clarify that your money isn't directly invested in these market indices. Instead, they serve as a reference point for crediting your annuity account. This separation ensures your principal remains intact and safeguarded by the contractual guarantees provided by the insurance company.

The Inside and Outside Lanes: Principal and Riders

The FIA structure is dual-laned—both heading towards a secure retirement. The 'inside lane' represents your principal, capped by market indices. Some FIAs use a participation rate, an uncapped strategy to grow your value based on the market's performance. The 'outside lane' symbolizes riders—additional features that can enhance income or death benefits. For instance, if the 'inside lane' earns a 2% return on a $500,000 indexed account, that's a $10,000 increase. Through a 175% participation rate, the 'outside lane' could credit $17,500 towards an income or death benefit rider.  

The Guarantee: Lifetime Income and Death Benefits

One of the standout features of many FIAs is the ability to provide a guaranteed lifetime income. Once the income rider is activated, the annuity ensures you receive a steady income, even if the principal amount runs out. This feature offers an irreplaceable financial safety net, allowing you to plan for a long and comfortable retirement without the fear of outliving your savings.   The Proof in the Pudding According to an Ernest & Young retirement study, only annuities, Social Security, and pension plans offer predictable, risk-free retirement income. And FIAs have been doing this reliably since their inception in 1995. They serve as a financial bulwark, allowing retirees to enjoy their golden years, knowing their financial well-being is backed by robust insurance companies.


What got you to retirement won't necessarily get you through it. While risk might be a friend during your accumulation phase, it can be a formidable foe when you depend on your savings. A Fixed Index Annuity offers a practical solution, safeguarding your principal and guaranteeing lifetime income. It's not just an investment; it's a promise for a secure, stress-free retirement. Don't let the financial insecurities cloud your retirement years. Choosing a Fixed Index Annuity may ensure a worry-free, guaranteed income throughout your retirement. It's more than just an investment; it's a long-term promise for a secure future.  
  • Transition to Distribution: Traditional investment methods have a high failure rate in retirement due to factors like "double or triple dipping."
  • Fixed Index Annuity (FIA): Acts as a protective highway towards a secure retirement, built on the foundation of "Zero is my Hero."
  • Dual-Laned Structure: FIA comprises an 'inside lane' for principals protected by market caps or participation rates and an 'outside lane' for riders that enhance income or death benefits.
  • Rate of Return: Market indices serve as signposts for returns, but your money isn't directly invested in these indices, ensuring principal safety.
  • Guaranteed Lifetime Income: FIAs can provide a steady income for life, even if your principal amount is depleted.
  • Backed by Robust Companies: Your FIA is supported by solid insurance companies, giving you peace of mind.
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Derrick Loflin picture

Derrick Loflin

Loflin Wealth


Inlet Beach, Florida 32461

(504) 356-4900

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