What is a Growth FIA?

Think of a Fixed Index Annuity as a way to achieve two things: a chance to grow your money when markets go up, and protection when they go down. It's like having a safety net for your investments while still giving you the ability to take advantage of market growth. Unlike traditional accounts, you can earn more when markets perform well, but you'll never lose money when they don't.

How are Growth FIAs taxed?

With a growth-focused FIA, gains grows tax-deferred until withdrawal. This allows your earnings to compound more effectively over time. When you withdraw the money, the earned portion is taxed as ordinary income. The one exception to that is if you used qualified retirement money as your principal investment. By using qualified retirement money as the principal, the entire withdrawal is taxed upon withdrawal, since that money was not previously taxed.

How does a Growth FIA earn interest?

Your returns are linked to how well certain market indexes perform, like the S&P 500. For example, if the index goes up by 10%, you might earn up to that amount (minus any limits). But if the market drops, you don't lose anything. Your money stays protected while you wait for the next opportunity to earn.

Can I lose money in a Growth FIA?

Your initial investment will be protected. With an FIA, the insurance company guarantees you won't lose money due to market drops. However, keep in mind that if you need to take out large amounts early, or if you're paying for extra features, these could reduce your account value.

What are caps, spreads, and participation rates?

These are the rules that determine your earnings potential. For instance, if there's a 7% cap, that's your maximum return for the year, even if the market does better. It's the trade-off for getting downside protection.

Can I withdraw my money if I need it?

You can typically take out up to 10% of your money each year without any penalties. This amount is your 'free withdrawal' amount. In the event you need more, you can take out larger amounts, but you may face additional charges during the surrender period. Many contracts also let you access more if you face hardships like medical emergencies.

Fixed Indexed Annuity: Growth

Fixed Indexed Annuities combine market growth potential with principal protection by linking returns to market indexed performance.

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Key features

When markets go up, you earn a portion of those gains, but when markets fall, you earn 0% instead of losing money. Growth-focused FIAs are a favorite for planners seeking growth opportunities while ensuring their initial investment stays safe.

Market Upside Potential

Principal Protection

Grow Tax Deffered

Market Upside

Benefit from returns tied to the market.

Tax Benefits

Growth is tax-deferred until withdrawal

Principal Protected

Protect your principal, even in a down market.

Safety

Backed by Insurance companies

Benefits

How Growth FIAs Work: simplifying your finance

Index Linking

Your returns follow market index performance (like S&P 500)

Upside Participation

When markets go up, you earn a portion of those gains

Downside Protection

When markets fall, you never lose your principal

Annual Result

Each year starts fresh - previous gains are locked in

Use Cases

Who Growth FIAs
Are Built For:

Balanced Growth Seekers

You want market-linked growth potential but can't afford to lose your principal. You're willing to accept caps on gains for downside protection.

Market-Wary Investors

You've been burned by market losses before, but don't want to miss out entirely on potential gains when markets perform well.

Pre-Retirement Accumulators

You're 5-15 years from retirement and need growth to reach your goals, but you want to protect what you've already saved.

FAQ

The Big Questions

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Annuity
‍Comparison

All types include the folowing:

Death benefit provisions

Free look period

State insurance guaranty fund protection

Tax-deferred growth

MYGA

Key Differences

Same rate for the entire term

Typically provides higher rates than traditional fixed annuitles

Considerations

Most restrictive withdrawal terms

Fixed returns without market growth potential

Fixed term length with no extension options

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Growth

Key Differences

Capture market gains with downside protection

Choose from multiple wealth building strategies

Guaranteed lifetime income available through riders or annuitization

Considerations

Crediting methods and caps can be complex

Can come with higher fees

Potentially longer surrender periods

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Income

Key Differences

More flexible withdrawal options than MYGAs

Clear, predictable income for life

Considerations

Typically offers lower rates than MYGAs

Returns may not keep pace with inflation

Rules and guaranteed income options can be complex

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An outstanding advisor

Nick didn't just read from a menu script. He was very in tune to my concerns. A major portion of our communication was via video chat, which makes a huge difference in customer satisfaction and impact of the presentation. The information was much easier to absorb.

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My HiWire Financial Representative was very patient with me. He answered all of my questions.

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Fixed Indexed Annuity: Growth

Key features

Market Upside

Tax Benefits

Principal Protected

Safety

How Growth FIAs Work: simplifying your finance

Index Linking

Upside Participation

Downside Protection

Annual Result

Who Growth FIAs Are Built For:

Balanced Growth Seekers

Market-Wary Investors

Pre-Retirement Accumulators

The Big Questions

Annuity‍Comparison

MYGA

Growth

Income

How lives are transformed

Hiwire made it easy

An outstanding advisor

All of my questions were answered

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Who Growth FIAs
Are Built For:

Annuity
‍Comparison

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are transformed

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