As a reminder when you are considering where you can place your hard-earned savings to generate a guaranteed income, remember that FIAs are insurance products that can guarantee income over a period of time — even over a lifetime.
Unlike a 401(k), the insurance company absorbs the risk of market downturns, guaranteeing a minimum floor, and protecting contract holders from market losses. In other words, an FIA offers the potential for interest, based in part on the performance of an external index without the risk of market loss.
Your principal amount is guaranteed, subject to any withdrawals you take or any surrender charges incurred due to early termination of the contract. Any growth in annuities is tax-deferred and most compound annually, meaning gains are locked in and added to your principal, with future interest earned on that compounded amount.