Stage 2: Entering and In Retirement
Protecting a portion of your assets from market loss right before and into retirement may create a lasting effect. Let’s look at how two major downturns in the market could have created a different story by utilizing a ViStar ® Fixed Indexed Annuity.
How Do Crediting Strategies Work?
FIA With 40% Participation Rate on the S&P 500
Year
S&P 500 Annual Return
1999
19.53%
7.81%
2000
-10.14%
0.00%
2001
-13.04%
0.00%
Growth of Your Investment
2002
-23.37%
0.00%
2003
26.38%
10.55%
Fixed indexed annuities offer 100% protection from market losses while in return providing a portion of market gains (if any) over a certain period of time. The portion of the gains credited to the ViStar ® Fixed Indexed Annuity are determined by the crediting strategy(ies) that you choose. The crediting strategies include a fixed interest rate, a participation rate, or a cap rate. Here’s how they work. Fixed Interest Rate – A predetermined interest rate guaranteed for a certain period. Participation Rate – The annuity receives a set percentage of the total index performance over a certain period. Example: Index growth of 10%, with a 40% participation rate, the annuity would earn 4% for that period. Cap Rate – The annuity receives 100% of the index growth up to a predetermined ceiling or cap. Example: Index growth of 10%, with a 4% cap rate, the annuity would earn up to its ceiling of 4%. Why are there multiple options to choose from? In various market conditions the strategies react differently. In the above examples, a large growth in the index would prove to be most beneficial with the utilization of the participation rate. While in a low growth environment, the cap rate would be best.
Annualized Return From 1999 - 2003
-1.91%
3.84%
FIA With 40% Participation Rate on the S&P 500
Year
S&P 500 Annual Return
2007
3.53%
1.41%
2008
-38.49%
0.00%
2009
-23.45%
9.38%
Annualized Return from 2007 - 2009
-7.13%
3.64%
Even with strong returns in the S&P 500 before and after the downturn, protecting against market loss with a fixed indexed annuity proved to be the better option. The year 2008 also proved to be a trying time for those looking to start retirement or even stay retired. Imagine if market protection had been used effectively for those who needed it the most.
Stage 3: Creating a Legacy
One of the many benefits to owning a ViStar ® Fixed Indexed Annuity is the ability to create a legacy. Legacies can take on many forms; the great advantage is the ViStar ® is a versatile financial tool that can help serve various needs. Here’s some various forms of legacy creation available utilizing a fixed indexed annuity… • Opportunity to pass accumulated wealth to children or grandchildren who are designated as beneficiaries
• These funds can be used to help with needs, such as: – Education – Wedding – Home
• Charitable causes
With the ViStar ® Fixed Indexed Annuity, you can plan for the future, but also live for today. No matter the stage in life, we are here to help.
8
9
ViStar ® Fixed Index Annuity
Clear Spring Life and Annuity Company
Made with FlippingBook - Share PDF online