Annuities
Fixed Indexed Annuities
Principal protection with growth opportunity, engineered for those who refuse to choose between safety and performance.
At RM Legacy Group, we provide access to Fixed Indexed Annuities from the nation’s leading carriers, selected for financial strength, product design, and long-term reliability.
FIAs are purpose-built for individuals seeking meaningful growth potential without exposure to market loss. Each contract combines principal protection, tax-deferred accumulation, and lifetime income options, with select programs offering an initial premium bonus of up to 30% on eligible allocations.
How FIAs Work
• Principal Protection: Account values never decline due to negative index performance. Your principal remains permanently safeguarded, subject to contract terms.
• Growth Credit: Interest is linked to an external index such as the S&P 500®, determined by the carrier’s cap, participation rate, or spread. Rates adjust periodically. Future values are not guaranteed.
• Tax-Deferred Growth: Earnings accumulate without current taxation until withdrawn, allowing compounding to work uninterrupted over time.
• Guaranteed Income Option: Optional riders can convert contract value into lifetime withdrawals for an individual or couple, based on selected features and rider costs.
• Estate Efficiency: Beneficiaries can typically receive proceeds directly, often bypassing probate entirely. Tax treatment follows federal and state law.
• Premium Bonus Potential: Select carriers credit an upfront bonus ranging from 10% to 30%, typically applied to the income base. Bonuses may vest over time and are subject to contract terms.
Interest Crediting Method
Premium Allocation
Funds are strategically distributed among fixed or indexed strategies based on client objectives and contract design.
Crediting
The insurer applies a cap, participation rate, or spread to determine credited interest based on index performance. Parameters may adjust in future contract years.
Zero Floor
When the index performs negatively, interest credited for that period is 0%, permanently protecting all prior accumulated gains.
No Direct Market Exposure
FIAs track an index as a performance benchmark only. They never invest directly in the market or pay dividends, providing growth potential without direct market risk.
When an FIA May Be Appropriate
Pre-Retirement
Helps preserve accumulated gains, reduce portfolio volatility, and protect decades of discipline in the critical years before retirement.
Retirement Income
Delivers predictable, guaranteed lifetime income options through rider-based structures that cannot be outlived.
Portfolio Diversification
Adds a principal-protected, tax-deferred component that balances market-exposed assets and stabilizes overall portfolio performance.
Legacy and Estate Planning
Coordinates seamlessly with trusts and life insurance strategies to streamline wealth transfer and maximize what passes to the next generation.
Understanding the Premium Bonus
Certain FIA contracts provide an upfront bonus, often ranging from 10% to 30%, typically applied to the income base, an internal calculation used to determine guaranteed income rather than a direct cash deposit. Bonuses may follow a vesting schedule and are often balanced by longer surrender periods or adjusted crediting parameters. At RM Legacy Group, we evaluate every bonus structure with rigor, ensuring clients fully understand the trade-offs before any commitment is made.
Strategic Use in Portfolio Transitions
Transforming inefficient assets into protected, tax-efficient structures built for the long term.
FIAs can be used to replace high-fee or market-exposed retirement accounts such as older variable annuities, 401(k)s, or IRAs during a rollover or transfer. Premium bonuses can help offset surrender penalties, advisory costs, or other transition expenses. Each transition is evaluated with full attention to liquidity needs, long-term efficiency, and client objectives before a recommendation is ever made.
Advantages
- Offsets transition costs through strategically credited bonuses
- Preserves tax deferral through qualified trustee-to-trustee rollovers
- Strengthens lifetime income potential as bonuses compound within the income base
- Improves overall portfolio stability by eliminating direct market risk exposure
Considerations
- Surrender periods typically ranging from 5 to 10 years limit early access to funds
- Liquidity is generally restricted to approximately 10% penalty-free per year
- Withdrawals prior to age 59½ may incur federal tax liability and IRS penalties
- All guarantees depend entirely on the financial strength and claims-paying ability of the issuing carrier