Annuities, Santa Clarita, CA

A Fixed Index Annuity (FIA) is an insurance contract between you and a life insurance company designed to help you accumulate assets for retirement. They offer low financial risk, conservative returns, and protection for market ups and downs. You pay premium to the insurance agency in return for regular income payments over a period of time, beginning at some point in the future. If you are looking for a retirement strategy that protects your principal, has some good upside potential, and provides a predictable guaranteed lifetime income stream in retirement1, a FIA may be something to consider.

Are you in or near retirement? One of the most common fears for retirees and those planning for retirement is outliving their money. Learn how annuities can help generate a steady stream of income or increase your current savings. They can also help you leave a legacy and provide income for your heirs.

The purchase of an annuity is an important financial decision. Be sure to schedule a full discussion with our company about your retirement needs before making any decisions.


1Product and features may differ depending on the state of issuance and may not be available in all states. Guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Do all Annuities protect you from market risk?

Have you heard the saying “too good to be true”? In money matters, if something sounds too good, it likely is. In financial markets, nothing is risk-free, and if someone is trying to sell you a guaranteed profit or returns on your investment, then my dear investor, you need to stay a dozen miles away from them.

There is an array of risks while investing your money in any asset class, and to be honest, without having “analysis paralysis”, we need to understand we won’t be able to avoid all risks. Still, we always look to maximize returns within your risk tolerance. Therefore, we must choose our investment plans according to our financial goals and our risk-taking capacity.

If we are in our retirement age or getting close to it, taking less risk with our savings should be a well thought out plan as we are at a critical stage. And if any unforeseen event unfolds, there will be little to no time left to recover from the loss. To combat this risk, people have started to include Annuities in their portfolios.

You may wonder, WHAT ARE ANNUITIES?

An annuity is a contract issued by financial institutions generally offered by an insurance company to generate steady income during retirement days. This investment product tries to beat the longevity risk, i.e., the risk of outliving your savings. One of the most lucrative features about them are they are given favorable tax treatment from IRS. There are no taxes until you withdraw money from the annuity, i.e., Annuities offer tax-deferred growth.

Annuities are divided into 2 phases:

  • First is the accumulation phase– This is the first phase where investors fund the product by paying a lump-sum amount or investing periodically.
  • Second is the Annuitization phase– this phase marks the completion of funding by the annuitant. The product begins the stream of payments to the annuitant for the rest of their remaining lifetime or a fixed period.


As with any other investment vehicle, there are many types of Annuities, each having its pros and cons. Annuities are broadly classed under three categories: fixed annuities, fixed-indexed annuities, and variable annuities. As the saying goes, “no size fits all”, so we need to review a wide array of factors like annuity costs and benefits. Make sure you perform due diligence and extensive research before purchasing one for yourself. Here are some of the key components of each below.  Let’s try to understand these three types in simple terms.




They provide a regular periodic cash flow of income to the annuitant.

Gives a sense of security as a fixed annuity assures fixed and steady payments per the contract’s interest rate.


They have the most straightforward contract terms of all annuity types.


Helps in budgeting your expenses as you know how much income is going to come your way periodically.

These are illiquid, with typically one withdrawal per year up to 10% of the account value.


The upside ends after the certain number of years, and the annuitant needs to re-up their contract at rates that are subject to change.



This annuity is tied to an investment fund or a portfolio, which allows the annuitant to reap the benefit of how well the annuity fund is performing. It can lead to a considerable amount of risk, but so is the reward.

Potential higher returns- If the fund does well, you are rewarded with larger payments Risky and volatile- No fixed amount; if the fund/market performs poorly, you receive smaller payments. The principle can lose value.


High fees– these are very expensive and come with various charges.


Complex terms – these types of annuities have complex terms.



These are the hybrid annuities that combine the features of both fixed and variable annuities. This balances between the risk and reward by providing the annuitant with risk lower than a variable annuity and a chance to earn a higher growth and income than a fixed annuity.

Potential higher returns- In this annuitant can reap the benefit of the index fund performing well.


Stable and secure- enjoy high benefits while enjoying the protection of guaranteed minimum rate even if the fund’s performance drops.


Complex terms – these types of annuities have complex terms and are costly compared to the fixed annuity.





FIXED Guaranteed fixed returns LOW PREDICTABLE
VARIABLE Correlated to an investment fund HIGH UNPREDICTABLE
FIXED INDEXED Correlated to an investment fund with a preset minimum. MEDIUM EQUAL OR ABOVE A SET LEVEL


Are you at or near retirement? Then you should consider looking into an annuity that will protect your retirement days by eliminating the risk of outliving your savings. Prestige Financial Advisors can help eliminate that fear, as executing the right plan and strategy under the guidance of a licensed professional can help you achieve your desired financial freedom.

Fixed Index Annuities are designed to meet long-term needs for retirement income, and they provide guarantees against the loss of principal and credited interest, and offer the reassurance of a death benefit for your beneficiaries.

Guarantees are backed by the financial strength and claims paying ability of the issuing company.

An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to non-qualified distributions. Consult a tax advisor for specific information. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.  This information is designed to provide general information on the subjects covered.  It is not intended to provide specific legal or tax advice.  You are encouraged to consult your personal tax advisor or attorney.