EQUITY INDEXED ANNUITY VS MUTUAL FUNDS
Phoenix Mututal Funds vs Phoenix Annuity
Hundreds of thousands of Americans own a 401k or IRA and most of these assets are invested in mutual funds. There are some "experts" who believe the U.S. economy is headed for a major slump. While I am no economic guru, one statistic that is certainly concerning is the coming retirement of baby boomers.
BABY BOOMERS: In a few years the first of the baby boomers begin retiring and officially we are on the clock for the next couple of decades. Most concerning is the fact that the number of workers per social security recipient is dwindling. Factor in a potential mess in regards to a long term care crisis and you do have to wonder about how the economy can weather so many storms.
LONG TERM CARE CRISIS: Few retirees are purchasing long term care relative to the number of retirees in total. Who is going to care for the elderly in their final years if these folks do not own long term care insurance? The government can access their assets, but that is a pittance compared to the number of Americans who need LTC care in the coming decades.
ECONOMY: The Japanese economy struggled for a decade or longer. Can the same happen to the U.S. economy?
While I recommend visiting with a qualified investment advisor, I also suggest you consider adding an Equity Indexed Annuity to your portfolio.
WHY BUY AN EQUITY INDEXED ANNUITY?
LET'S COMPARE A MUTUAL FUND VERSUS AN EQUITY INDEXED ANNUITY
An EIA has a participation rate, which means you and the insurance company share in the profits. Say your EIA has an 80% participation rate. If the S & P 500 increases by 10% your return is 80% of that or 8%. If the S & P 500 tumbles 10% you earn 0%. Your principal is protected in down markets. Zero in a down market is better than a poke in the eye.
A MUTUAL FUND offers a potentially greater return. It also offers a potentially worse year too. While most mutual funds are not attached to a specific index, like an EIA is, their rate is more difficult to track with the literally thousand mutual fund choices out there.
The EQUITY INDEXED ANNUITY ties its rate to an index, such as the S & P 500 or the Russell 2000. You have other indexes to choose from as well. Since you are in an index the historical rate of return is much easier to track than carrying multiple mutual funds.
An investor could own a dozen different fund companies within a mutual fund, making the tracking a little more involved. Tracking the history of a specific index is alot easier.
Consider owning and EIA to balance the investments you have in mutual funds.
Visit my website and read my article titled: Equity Indexed Annuity Phoenix Mutual Funds OR Phoenix Annuity
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