Check out Jeremy’s latest podcast on retirement planning by listening on “Apple Podcasts” or “Google Podcasts” or read below for What You Should Know Before Buying an Indexed Annuity.

[155] How much of your monthly retirement paycheck do you want to be guaranteed?

That’s right. There are ways to have consistent, guaranteed sources of income in retirement. For example, an indexed annuity.

In this episode, Jeremy Keil speaks with Jeremy Lach, founder & CEO of Empire Marketing Partners, LLC, about the good, the bad, and the ugly of indexed annuities. In other words, they explain how indexed annuities can benefit your retirement and the costs associated with them, so you can make an informed decision.

They discuss:

If you’re like many people, the term “annuity” might conjure up a mix of curiosity and confusion. Common myths about annuity may also give it a bad reputation for some people. In this blog, we will unpack the good, the bad, and the ugly of indexed annuities!

Follow along to delve into the core workings of indexed annuities, explore their key features, decode essential terminology, and gain valuable insights into their pros and cons.

If you know how annuities work, you’ll be better positioned to make an informed decision: Is an Indexed Annuity Right for You?

Indexed annuities, previously known as equity-indexed annuities, are generally designed to provide a combination of guaranteed income and the potential for investment growth. They can provide some upside potential while also offering protection against market volatility.

The specific type of indexed annuity suitable for you depends on your financial needs and objectives. Understanding these priorities is crucial.

Two important questions to ask are: 1) How long do you need the annuity for? 2) Are you prioritizing growth potential or income benefits?

Before answering this question, first consider: How much of your retirement income do you want to be guaranteed?

For example, you may say that you expect to spend $10,000 per month in retirement, and you would like 75% (or $7,500) of it to be guaranteed. Your Social Security and pension benefits may not be able to cover the full $7,500. In that case, having an indexed annuity as an additional source of guaranteed income can be beneficial.

As indexed annuities enable you to participate in market gains, they are also a popular choice for those seeking a balance between income security and the opportunity for modest market-linked gains. Due to the downside protection in indexed annuities, individuals with a low risk tolerance may also find them appealing.

There may be several misconceptions about indexed annuities, but we would like to highlight two of them:

We came across an interesting article by Kiplinger, which has a list of different concepts you should know before buying an indexed annuity. They are summarized below:

(Note: Generally, caps, participation rates, and spreads are not enforced simultaneously in indexed annuities. These features are distinct and may be used separately or in combination, depending on the specific annuity contract.)

In many cases, financial advisors may receive commissions for selling you indexed annuities. The amount and structure of these commissions can vary based on the specific annuity product and the arrangement between the advisor and the insurance company. The commissions can often range from 2.5% to as high as 7%. Alternatively, advisors can also opt for fee-based indexed annuities, where they charge fees as a Registered Investment Advisor (RIA) firm. Remember, the level of commission on any contract does not determine if it is good or not!

Advisors today are encouraged by carriers to disclose their costs and commissions to clients for greater transparency and trust. So, the next time an advisor tries to sell you an annuity, ask them about their commission! If they are hesitant to share, perhaps it’s time to move on to another advisor.

To learn more about indexed annuities, check out the resources below!

If you have any questions, feel free to contact us using the contact information provided below!

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Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.

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This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.

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