The benefits it provides you. You choose the investment for your IRA based on the benefits it provides you. You can put any investments you want inside an IRA. For an index annuity, essentially, the benefits available to you would be for your IRA: safety of principle and growth. That’s what most people want.

There are three ways to have your money completely protected against losses. The first is FDIC insurance. In a one-year CD right now, at the time I’m taping this DVD, the rate of return is going be about 1%, which is not acceptable to most people. The second way is treasury bonds. If you buy a 10-year treasury right now, you will get about a 2% rate of return. The third way to have your money completely protected against losses is with a guaranteed insurance contract. The best guaranteed insurance contracts historically average about a 6 to 8% rate of return. A good guaranteed insurance contract allows you to go up with the market, lock in your gains, and when the market goes down, you don’t lose anything. You do receive compound interest, and there are no fees. If you want that, you’re going to have to get over the word annuity because that is the only way to get it.

What a great question. These are guaranteed insurance contracts. To gain the status of a guaranteed insurance contract, the insurance company has to reserve 102% or more of what you put in. Those reserve are separated, they are segregated, and they are monitored on a regular basis. So, God forbid the insurance company does go belly up, there is enough money in reserve accounts to pay you back. Because of that track record, because of those reserving rules, in the history of our country, no one has ever lost one cent in a guaranteed insurance contract. And because of that track record, I feel very comfortable telling you your money is in a protected place. All of that being said, I highly recommend that you do business with a highly rated insurance company. At Ty J. Young Inc., we call them top tier financial ratings: A-, A, A+. Those are the best ratings out there. Look for insurance companies with those ratings.

You know, I hear that all the time. I hear people say, “I’ve got to wait for the market to come back before I move my money and get it protected.” Well, I’ve got good news for you: when you put your money into a good index annuity, it is not a departure from the stock market. It is not a departure from the gains of the stock market. It is a departure from the losses, so you will still participate and come back as the market comes back, but when the market goes down, you don’t lose. So with a good index annuity, you put yourself in a position where you can make the money back, and you continue to go forward and never backwards. Remember, a good fixed index annuity allows you to go forward with your money, but never backwards, up and never down, and the driver of that is an index: the S&P 500. You can be in the same market you are in now, but you can get rid of the downside. That is huge to a lot of folks.