How To Protect Your S&P 500 Funds + Potential Lifelong Income? | Fixed Indexed Annuities

The S&P 500 just hit another all-time high - how can you protect your investments from crashing down again while still keeping up to potentially 9% upside? And lock in a guaranteed lifelong income at the same time?

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The SP 500 just hit another all-time high. How can you protect your investments from crashing down again while still keeping some upside and lock in a guaranteed lifelong income at the same time? Hello, Diamond Nestec Member Super Savers and Course fans. I hope you're healthy and well. So, as we mentioned in yesterday's video, the SP 500 hit another all-time high of 7,580 this past Friday on May 29th, 2026. And all this while medium and long-term treasury yields have continued to fall from their mid-month highs. It's no wonder then that many of you are worried at the moment about all the hard-earned money that you've invested in the market right now and why fixed indexed annuities fias have touched a nerve, as we've seen from all the inquiries we've received about them recently. In a nutshell, fixed index annuities offer you 100% principal protection against a significant market downturn, while allowing you to stay invested in the SP 500 with up to 9% upside participation in year one at the time of this taping on May 29, 2026. These potentially higher returns may also protect you against inflation to a certain degree, at least more so than most plain vanilla fixed income instruments can. Plus, you can lock in a guaranteed lifelong minimum income while markets are at their all-time high with this FIA, if that's what you want. So with that in mind, here are the three topics that we'll be covering today. One, what is an income rider? And how does it work with a fixed indexed annuity? A FIA. Two, what are some illustrative sample numbers for a FIA with an income rider? And three, who may or may not want to consider a FIA with an income rider? And what's our personal perspective? Let's dive in now, folks. What is an income rider? And how does it work with a fixed indexed annuity? A FIA. An income rider, sometimes also called a guaranteed lifetime withdrawal benefit, is an addition to your standard or base fiat contract that allows you against an extra fee and at your discretion to convert your fiat into a guaranteed lifelong income stream. Let's quickly recap seven key points about fixed indexed annuities, fias, as these will remain the base for the income rider that gives you the option to turn on a guaranteed paycheck for life. 1. Fixed indexed annuities or fias protect your principal against market downturns. So let's say you invest $100 into a fiat that tracks the SP 500. When the fiat matures, you will get back your $100, and it doesn't matter if the SP 500 has fallen by 2%, by 50%, or even more in the meantime. 2. Your principal protection may only work perfectly when your fiat matures. The industry refers to this as a point-to-point guarantee. So, for example, you know that you will always get your $100 back when your fiat matures, but this may not necessarily be the case if you want to exit the contract early. Think about it like the guaranteed principal repayment of a bond, which also only works if you hold to maturity. 3. FIAs let you keep a part of the upside of the underlying market index, but you always have to trade away the other part of any potential future gains. That's the price you pay for the downside protection. For instance, let's assume that you buy a FIA with a one-year cap of 9% on the SP 500. Then an initial investment of $100 into the FIA can only ever grow by 9% to $109 in that year, even if the SP 500 went up by 25% or even 50%. Still, even this partial upside from an underlying equity index may give you a certain degree of protection against inflation, so long as equity markets as real assets keep going up with inflation. 4. With a fiat, you don't own any shares in the SP 500 or any other index you choose directly. Fiat are an insurance product and depend on the ability of the insurance company to keep its promises. Always make sure you understand the credit rating of the insurance company you buy your fiat from. Five, fias are designed as multi-year products, often with a time horizon of five to ten years. For example, you might invest $100 today and get access to your principal plus all potential growth on top at the end of the contractual period in five or ten years. However, there are exceptions, as often in finance, such as how long the upside cap is fixed for and other rules for upside sharing. For example, the 9% upside cap that we've mentioned before is valid for one year from the start of your contract, and it will then reset depending on the then current market conditions. And the next upside cap may be higher, lower, or even the same as the 9% in year one. You just don't know beforehand. 6. FIAs can be personalized in many different ways. That can be a big advantage in customizing a fiat to your individual goals, circumstances, and expectations. But it also makes them more complicated, especially if you compare them to standardized alternatives like structure protection ETFs, which are designed for everyone, so to speak. 7. In their most basic form, fias are illiquid and do not pay regular distributions during their contractual period. In other words, assuming that you invest $100 into a 10-year fixed index annuity, you will generally not be able to access your principal before the contract matures, and you will generally not get any regular income during your holding period. There's some exceptions here as well, though, including most prominently income riders, which brings us right to the core topic of today's discussion. As I mentioned earlier, an income rider is also called a guaranteed lifetime withdrawal benefit. This is essentially an addition to your standard or base fiat contract that allows you against an extra fee and at your discretion to convert your fiat into a guaranteed lifelong income stream. In other words, you turn on the income rider, your guaranteed lifelong income stream, when and or if you feel like it over the term of your fiat. An income rider works in three key steps. In the first step, you buy the income rider together with the fiat. And yes, you need to do that right at the beginning. An income rider cannot be added to a fiat later on. The rider will cost you an extra annual fee, often starting in the range of 1% to 1.5% per year. Once you purchase the income rider, it will already guarantee you a minimum income for life. The way it works is that your contract will define a so-called benefit base that is usually the amount you invest in your fiat. The contract then assigns a fixed minimum percentage that it will pay out to you every year for as long as you live. We'll show you some illustrative numbers shortly to give you a better feeling. And just as your principal is always guaranteed in a fiat, your benefit base can only ever grow or stay the same. It can never shrink. So even in the worst case, if after you signed your fiat contract with an income rider, markets were to start falling immediately and then keep going down for the rest of your life, your benefit base and your monthly paycheck would be guaranteed at their initial levels. In the second phase, after you sign your contract, but before you turn on your income rider to convert the principal in your fiat into a guaranteed paycheck for life, the fiat works in principle like any other fiat with full downside protection. If the markets keep going up, your benefit base might potentially grow and your expected future lifelong paycheck with it. However, the growth will not be limitless. Remember, fias cap the upside from the market. That's the price you pay for the downside protection. And this is true for the benefit base as well. For example, the growth of your benefit base might be capped at 9% per year, and there will usually be a lifetime cap as well. For instance, something like maybe 250% of the initial benefit base. You will also be charged the annual fee for your income rider, and because the fee is defined as a percentage of your benefit base, it may go up in absolute dollars if your benefit base grows. During the second phase, a fiat doesn't pay you a regular income yet, but you're not completely locked in either, as it will have a surrender value before maturity. So if you decide to terminate your contract early during this phase, you may be able to do so and get paid out in cash what's accumulated in your fiat minus any early withdrawal penalties. The surrender value may go up over time if markets do well. However, potential gains are not guaranteed, and the surrender value may be less than you initially invested and also less than the benefit base, and it will go to zero at some point. But more about that later. Let's move on now to the third phase. Whenever you're ready, you turn on your income rider and start receiving your monthly checks for life. Do note that this is done at your discretion, meaning it's entirely up to you when and or even if you want to turn on the income rider on your fiat. You can turn it on on day one after you sign if you want. But you can also wait and let your capital and benefit base potentially grow with the markets. The important thing to remember here is that whenever you do turn on your income rider and start receiving your monthly checks for life, your benefit base freezes at that point for lack of a better term, meaning that you will get the exact same paycheck every month for as long as you live. That paycheck will never go down, but it will also not go up. And because you're starting to dip into your capital, so to speak, the surrender value, the cash value of your fiat will generally also start going down over time until it reaches zero at some point. Of course, so long as you don't terminate your fiat, regardless of what the surrender value may be, your paychecks will keep coming every month. That's the charm of a guaranteed lifelong income. So that may have been a lot to take in. As we always say, annuities can be customized to your individual situation. So if at this point you want to see how a FIA might be able to protect your hard-earned savings against a potential market crash and what the FIA upside caps on the SP 500 and your income riders might look like for you personally, email us at jenniferdiamondnestec.com so that we can connect you with our trusted annuity specialist who can walk you through all the details step by step. And let's move on now to some examples in the next part of today's discussion that may also help you to even better understand how a FIA with an income rider works. What are some illustrative sample numbers for a FIA with an income rider? So let's take the example of a married couple, George and Ellen. George is 69 years old and Ellen is 67 years old. George and Ellen's plan is to lock in a part of their retirement savings at current market levels near record highs, keep some of the potential market upside for the next five years, and then start receiving their monthly or annual paychecks for life around the time when they will have to take their required minimum distributions or RMDs. And let's assume George and Ellen invest $100,000 into a FIA with an income rider via an A double plus insurance company. A double plus is the best possible rating that an insurance company can get from AM Best, a ratings agency that specializes in the insurance industry. Let's further assume that George and Ellen choose the SP 500 as their underlying index with a 9% upside cap in year one, meaning that after year one, the upside cap will reset every year according to market conditions. And they select joint life as their future payout option, meaning that so long as one of them is alive, the guaranteed monthly checks will keep coming. Now, please keep in mind that the numbers that we're about to share with you in this George and Ellen example are for illustration purposes only and based on market conditions at the time of this taping, on May 29, 2026. Past performance is not indicative of future results or outcomes, and your personal rate will depend on a number of factors, including your age, state of residence, the insurance company you're purchasing from, and so on. Your personal rate is not fixed before you sign your annuity

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contract. Here

(Cont.) How To Protect Your S&P 500 Funds + Potential Lifelong Income? | Fixed Indexed Annuities

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are some illustrative numbers for George and Ellen's $100,000 fiat with an income rider example. This column shows the contract year for the fiat. This column shows the benefit or income base at year end, as defined by the purchase of the income rider. This column shows the available benefit or income amount per year. This column shows the paid-out benefit or income per year if George and Ellen were to turn on the income rider. This column shows the rider charge per year. And this next column shows the surrender value at year end if George and Ellen were to terminate their contract early. And this last column shows the additional death benefit that George and Ellen's beneficiaries would get if the two were to pass before their time, on top of the surrender value at year end here. More on this later. So let's start from the beginning and say that on day one, George and Ellen buy this $100,000 fiya with an income rider. Their benefit base or income base at this point would be $100,000, what they had originally invested. And if George and Ellen were to immediately turn on their income rider, as I said before, that's often possible, they might expect a guaranteed lifelong income of $7,150 per year, equivalent to 7.15% of the benefit or income base of $100,000. Now, if George and Ellen were to do this, if they were to immediately turn on their income rider after buying their fiat, then this FIA with the income rider would pretty much work like a SPIA, a single premium immediate annuity. This $7,150 would be their guaranteed income per year for life, but neither the benefit base, the income base, nor the actual payouts would grow over time. George and Ellen would essentially have immediately locked in this guaranteed value without waiting for any potential upside. The only difference versus a SPIA in this instance is that with this FIA with an income rider, George and Ellen might still have some surrender value despite having already begun to take income, which may still give them more flexibility than a SPIA, which is irrevocable as soon as the first paycheck goes out. But immediately turning on the income rider for this FIA is not the plan here for a couple anyway. Instead, and as we discussed earlier, we're assuming that George and Ellen let their money sit in the fiat and worked for five years in the equity markets with full principal protection. And as you can see here, based on the most recent 15-year period for the SP 500 at the time of this taping on May 29, 2026, George and Ellen's benefit or income base and their available yearly benefit or income amount would have kept growing nicely between contract years zero and five. Their initial $100,000 investment would have grown to $145,000 at the end of year five. And at the beginning of year six, when they're planning to take their income, their benefit or income amount per year would have gone from $7,150 to $11,963. And this increase in the available yearly payout comes not only from the growing benefit or income base, but also from a higher payout percentage. While George and Ellen started with 7.15% of the benefits base here in contract year zero, this went up to 8.3% by year six in our example. That's this yearly payout of $11,963 in contract year six divided by the benefit or income base at year end of $145,000 here. Once George and Ellen activate their income rider, the higher benefit base and yearly income of $11,963 are now locked in, frozen as we mentioned earlier, and guaranteed for life. We show it up to year 20 here on the chart, but it would continue for as long as either George or Ellen are alive. Now, the numbers you see in this example are illustrative values based on the most recent 15-year period in the markets. And as we often say, past performance is not indicative of future results or outcomes. The past 15 years and especially the past five years were very strong years in the market, and there are no guarantees that we will see something similar again. But even if markets were to go down at some point, any increase of the benefit base that has already been credited to the account would be guaranteed and locked in, meaning it wouldn't go down again. And in the worst case, if markets started falling immediately after the signing of the contract, the initial available benefit amount of $7,150 would always be guaranteed, no matter how markets do, and regardless of when George and Ellen were to start taking their benefits. Let's look at the annual rider charge now. It starts at $1,100 in year one, equivalent to 1.1% of the initial investment amount of $100,000, but then keeps growing with the benefit or income base until it reaches $1,595 in year six. The annual rider charges are shown here to give you full transparency, but you do not need to deduct them again from any of the numbers on this table. All potential benefits and payouts are already net of the charges, similar to how ETF performance figures already deduct the fees. In other words, these rider charges do not impact the benefit or income base and annual payouts at all. And as I just mentioned, they are already deducted from the surrender values shown here. Keep in mind that with a FIA with an income rider, George and Ellen still have the flexibility to exit the contract early, and in such a case, they would be paid out their surrender value in cash, so long as the surrender value is positive. And while we haven't shown it in this illustrative example, because we couldn't fit too many more rows on the slide, there remains some surrender value in the fiat for about 17 years. But by year 20, the cash surrender value has basically shrunk to zero. And George and Ellen would not get any cash payouts anymore if they were to terminate the contract. And speaking about the surrender value, so long as it remains positive, it will be paid out to the estate of our couple after both are deceased. And if George and Ellen were to both pass before the income rider is turned on, their beneficiaries would even get the rider charges back on top in the form of this additional death benefit here. In other words, if George and Ellen were to die early, say in year five, just before they turn on their income rider, their beneficiaries would get this surrender value at year end of $116,484, plus this additional benefit of $6,490 for a total of $122,974. So now that you know how a FIA with an income rider might work for George and Ellen and why some of our Diamond Nestec regulars are interested in them, particularly now, to potentially hedge against a steep drop in equity markets that seem to be hitting one high after another, email us at jennifer at diamondnestec.com to get connected with our trusted annuity specialist so that he can walk you through step by step and show you what your FIA numbers might look like, either with or without an income rider. And let's move on now to the next part of today's discussion. Who may or may not want to consider a FIA with an income rider? And what's our personal perspective? As many in our community know, we're big fans at Diamond Nastic of covering all essential living expenses in retirement with a guaranteed lifelong income stream, what we call the base part of your portfolio. And a FIA with an income rider fits the bill perfectly, as it can provide you with exactly that a safe, stable, and predictable income that lasts a lifetime. Plus, all the most highly rated insurance companies offer fias. And it's also guaranteed by your State Guarantee Association if you stay within your limits. Everyone's financial journey is different and there's no one size fits all solution. But in our minds, we can see the Following use cases for FIA with an income rider. First, you want principal protection, but you also don't want to miss out on some of the potential upside in equity markets. Perhaps because you're worried about the current bubbliness of the market, or perhaps because you're concerned about possibly higher inflation before you start taking your guaranteed lifelong income. In this case, the potential upside from the underlying index within the cap may give you some protection against price levels rising as long as your chosen index continues to rise with inflation. Keep in mind though that your annual benefit will be locked, frozen, and will not go up anymore once you start taking the income from your fiat. There are also other solutions such as structured protection ETFs that can give you downside protection with some exposure to equity market upside and higher liquidity than fias. But the higher liquidity of these structured protection ETFs may come at the expense of lower equity market upside caps. Plus, a fiat with an income rider is the only product we're aware of that can combine 100% principal protection with some exposure to equity market upside and guarantee of a future lifelong income. Moving on now to the second use case for a FIA with an income rider. You're near retirement or already in retirement, but still have a few years left before you're planning to take additional income. A FIA with an income rider gives you the certainty that you have already locked in a guaranteed minimum future income while still keeping some of the potential upside for those later years. This may be especially true if you expect interest rates to fall going forward. Third, you want to stay flexible because you don't know yet when you will need the additional income. A FIA with an income writer gives you the certainty that whenever you need it, you can always turn on an additional guaranteed income stream that has been locked in at the day of signing. And if it turns out that you'll never need the additional income after all, you will be able to cash out your hopefully growing surrender value. Fourth, you want to start taking income right now, and the FIA with an income writer will send you larger monthly checks than alternative products like a SPIA, a single premium immediate annuity. Now, that will not always be the case, but we have seen it happen, so it may be worthwhile comparing both options before you decide. Fifth, you want to take income right now and can accept potentially lower monthly checks from a fiat with an income rider because it may have a residual surrender value for a while, allowing you to potentially terminate the contract again or to pass on something to your estate. In contrast, traditional spias are irrevocable once the payouts start and do not pass on any unused residual value typically. On the other hand, a fiat with an income rider may not be for you if you check one or more of these boxes. You're still in the growth stage of your financial journey and you have time to wait out a potential market downturn, even one that may be deep and or long. Remember that the caps on the upside of your underlying index may lead to significantly lower total returns in the long run with a fiat versus a direct investment in the market. You don't care about locking in a guaranteed lifelong income. You want liquidity and daily access. While a fiat with an income rider may be a flexible solution when compared to other annuities, it is still fundamentally an illiquid insurance product if you compare it to trader products, for example. You want a clear end date to your investment. Different from MIGAs and FIAs without income riders. FIAs with an income rider are designed to be converted into lifelong income at some point. They have no automatic maturity or endpoint. If you want to terminate the contract, you need to take the initiative and sell it back to the insurance company at the surrender value. You want to spread your money across smaller investments. While some insurers offer fias with an income rider from $10,000 to $25,000, many annuities sold are typically in the range of $100,000 and up, especially if you want the best rates. And as always, if one or more of these use cases here for a fiat with an income rider apply to you, or if perhaps you're interested in fixed annuities without an income rider, email us at jenniferdiamondsec.com so that we can connect you with our trusted annuity specialist who can walk you through what the best annuity options and rates might be for your specific situation. Annuity rates track interest rates, and interest rates remain at two decade-long highs on average. So now may be a good time to lock in some of those rates if that's what you're interested in. Alright, Diamond Aztec members, Super Savers and Course fans, I hope you enjoyed today's video and learned something new. And see you again very soon with more brand new wealth building content for your financial journey.