The reason equity indexed annuities are obsolete is that the fixed annuity means your premium earns a minimum guaranteed interest rate. In other words you have two interest rates, a guaranteed rate and a current rate determined by an external index. The word equity has been dropped from the description of a fixed indexed annuity as to eliminate the confusion of insurance terms among consumers and agents.
A fixed index annuity is not an equity, therefore that term has been eliminated. Indexed annuities are the new and improved terminology. The word annuity is Latin for income. Annuities existed long before there was a tax code. The word deferred meant income later and still does today.
You can buy a fixed index annuity and wait 12 months to determine if any interest has been credited and then withdraw the previous years interest over the second year all at once, semi-annually, monthly even direct deposit to your bank account.
This is how to use a fixed index annuity with a current rate based on an index strategy you chose, to pay you a current income, in other words you can defer your income or interest payment for twelve months.
The safety and security of fixed indexed annuities that provide current income is a popular choice for an IRA, 4O1k, and 4O3b rollover at retirement
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Jeff McLeod is a fixed index-linked retirement income annuity specialist.
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