Ditch The Markets & Lock In Up To 9% Guaranteed Income Growth For 7 Years? | Fixed Indexed Annuity

Nervous about the markets & SpaceX IPO? What if we told you that there is a way to get an up to 9% growth spurt in your retirement income 7 years before retirement? Plus, 100% principal protection, while keeping up to 7.25% S&P upside for 7 years AND locking in a potential guaranteed income stream for life - let's recap the numbers for a fixed indexed annuity (FIA) with an income rider vs one without an income rider. 

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So, another week has passed. SpaceX's IPO was four times oversubscribed. The SP 500 is still near all-time highs, and some of you are getting even more nervous that equity markets may be headed south from here at some point in the not so distant future. Hello, Diamond Estee Member Super Savers and Quartz fans. I hope you're healthy and well. Given the current market environment and how attractive fixed index annuity fiat rates would track interest rates are, it's no wonder then this fixed index annuity video we did last weekend on how to get 100% protection for your principal while keeping up to 7.25% SP upside for seven years and locking in a potential guaranteed income stream for life seems to have hit a nerve. We've gotten a lot of emails asking to get connected with our trusted annuity specialists from folks in our community who want to see what the fiat rates might look like for their personal situation. And we've gotten even more questions about the guaranteed rollup that a fiat with an income rider can offer. The illustration in our video showed that with this guaranteed rollup, as the industry calls it, the benefit base or income base for the couple in our example was growing at a guaranteed rate of 9% every year, right up to the moment that they started receiving their first monthly annuity check. The prospect of your future lifelong income base taking a guaranteed growth spurt of 9% annually in the last year's before retirement can indeed look attractive. So Marcus and I thought it might make sense to recap how the numbers work in detail and compare a fixed index annuity without an income rider versus a fixed index annuity with an income rider and a guaranteed roll-up rate of 9%. Remember that the income rider is the additional clause or contract that you can purchase at the same time that you buy your fiat, and it allows you to turn on a guaranteed income stream for life when and or if you're ready. So today let's revisit the couple from last week's Fixed Index Annuity example, whom we've known for quite some time. Jack and Jill recently retired and moved to Florida to enjoy the retirement years in style in the sunny weather and without a state income tax. Jack is 66 years old and Jill is 65 years old, with most of their savings sitting in equity index funds in their 401ks. Like quite a few of our Diamond Neste members, Super Savers, and Course fans, what Jack and Jill want to do right now is to lock in their Nesteg at current levels before the market potentially crashes, as they fear it will. At the same time, they're not planning to take any distributions from their retirement accounts before they have to in about seven years, under the rules for required minimum distributions, RMDs, which also means that they wouldn't mind if they could let their savings grow a bit more in the meantime. Now, when Jack and Jill came to us, they had already made up their minds that they wanted to invest in a fixed indexed annuity or FIA to protect their capital while the same time keeping some of the potential market upside for the next seven years. Their big question was whether it might make sense for them to add an income rider to their FIA to lock in already now at the time of purchase a guaranteed lifelong income stream for the future. So, with that in mind, let's recap what the illustrative numbers might look like for a seven-year FIA with a 7.25% cap on the SP 500 and how that might differ if an income writer was added to lock in a guaranteed lifetime income stream for the future. Please keep in mind that all examples, numbers, and calculations in this video are as of June 5th, 2026, and are for illustration purposes only and not recommendations or reflective of actual situations. Past performance is not indicative of future results or outcomes, and if interest rates were to come down, the rates for new fias may also likely come down. Now, if at any point in this video you want more details into how fias work, what income riders are, and why we would personally opt for a fiat with an income rider if we were in Jack and Jill's shoes, please refer back to this deep dive from last week that I've linked below for your convenience. Or email us at jenniferdiamonestic.com so that we can connect you with our trusted annuity specialist who can walk you through all the details step by step and show you what your personal numbers might look like whenever you might be watching this video. Here are some assumptions we've made for Jack and Jill. First, they're investing $100,000 into a seven-year fixed indexed annuity or FIA with an A double plus rated insurance company. A is the best rating that an insurance company can get from AM Best, a ratings agency that specializes in the insurance industry. Second, they've chosen the SP 500 as the underlying index for their FIA. And third, their FIA has a 7.25% cap rate that is locked in for seven years, meaning that Jack and Jill may participate in the potential growth of the SP 500 up to 7.25% every year for the next seven years. So here are some illustrative numbers for normal FIA with no income rider versus a FIA with an income rider. In this column, we have the contract year with the initial investment of $100,000. In this section, we'll show the numbers for the normal FIA with no income rider. This basic FIA would give Jack and Jill full downside protection on their capital as well as the potential upside from future market growth, as we just discussed, but no guaranteed income for life. In this case, the goal for the FIA with no income rider would be to maximize the available capital at the end of year seven, and then for Jack and Jill to use that money to invest into a single premium immediate annuity, a SPIA, or a similar product to generate their guaranteed lifetime income stream at that future point in time. In this column is the guaranteed surrender value for this FIA with no income rider from years one through seven. And we can see that at the end of year seven, the guaranteed surrender value will be at least $103,302. Basically, this is the worst case scenario. So even if immediately after Jack and Jill put in their initial investment of $100,000 into this fire, markets started falling and kept falling throughout the entire period, Jack and Jill would still get back this guaranteed surrender value of $103,302 at the end of seven years. And in the next column is the potential surrender value for this FIA with no income rider from years one through seven, based on the most recent 15-year period of the SP 500, as per June 5th, 2026. And in this case, Jack and Jill would have $138,041 available as their surrender value at the end of year seven, which they could then cash out and freely use to buy a single premium immediate annuity or SPIA or a similar product to generate their guaranteed lifetime income stream at that point in time. Of course, we don't know yet, right now, what a SPIA or a treasury ladder or any similar investment would guarantee as annual income in seven years. So that's the uncertainty or the bet that Jack and Jill will be making by buying a FIA with no income rider. Let's look at the illustrative numbers for a FIA with an income rider for comparison purposes. And let's start with the guaranteed values, the worst case scenario in this light gray section. In this column is the surrender value, the cash value, which at the end of year seven is $103,302, exactly the same amount as for the fiat with no income rider from before. And this shouldn't be surprising. All fias guarantee your principal, whether you're buying an income rider or not, as an add-on. And even the charge for the income rider for this fiat here, more in this shortly, but even the charge for the income rider will not eat into this guarantee of your principal. In this next column is the rollup credit, $9,000 every year starting in year one. So the fiat with income rider in this illustration comes with a guaranteed rollup rate of 9% and a cap of no more than 10 annual rollup credits. Here's what this means. Take the guaranteed rollup rate of 9% and multiply by the initial investment amount of $100,000, and that's how we get to this rollup credit of $9,000 annually. And this rollup credit of $9,000 annually is how much your benefit base, this next column, will increase by per year. So in year one, we would add this rollup credit of $9,000 in year one to the $100,000 initial investment to get to this benefit base of $109,000 in year one. And in year two, we would add this rollup credit of $9,000 in year two to this benefit base of $109,000 in year one to get to a benefit base of $118,000 in year two, all the way up to year seven. Now, there is a charge for the income rider of approximately 1.1% of the benefit base here per year. But as we touched upon just now, that charge does not eat into your principal, your guaranteed surrender values here. In fact, all the numbers in this table, including the payout numbers that we'll be walking through in a moment, are already net of the 1.1% income rider charge. There is no need to deduct it again. So, what's sometimes surprising to folks is that the benefit base keeps growing, even in this worst case scenario for lack of a better term. But as we explained in the previous section, if your roll-up rate is guaranteed, it will be credited to your benefit base every year, no matter how the markets are doing. In this case, we can see seven credits of $9,000 cash here, which bring Jack and Jill's benefit base to $163,000 at the end of year seven. And because the benefit base keeps growing, so does the available benefit amount per year here. And based on this benefit base and the pre-agreed formula for the payout ratio, our couple will have a guaranteed income per year for life starting in year eight of $12,796. In other words, at this point, Jack and Jill will start receiving this $12,796 per year for as long as one of them is alive. Now, let's see what the illustrative numbers for FIA with an income rider look like when the markets do well. Again, using the same most recent 15-year period for the SP 500, as before for these surrender values for the normal FIA without an income rider. And the first thing that catches our eye is that the benefit base and the available benefit amount are exactly the same here as in the guaranteed values, the worst case scenario, for the FIA with an income rider. The same seven annual rollup credits of $9,000 are added to the benefit base, which ends at the same value of $163,000 as before. And the guaranteed income per year for life, starting in year eight, is also exactly the same at $12,796 per year. So, where would the upside from the strong performance of the SP $500 have gone then in this scenario, you might ask? And the answer here is the surrender value, the amount that Jack and Jill might get if they cashed out this fiat with an income rider. This surrender value has been growing with the market in this case. At the end of year seven, Jack and Jill would have a surrender value of $126,299 available to them, significantly more than the $103,302 in the guaranteed scenarios here, but $11,742 less than the $138,041 that the normal fiat without an income rider would have shown under the same market scenario. And the difference at the end of year seven when the markets are doing well between this $138,041 for the Fiat with no income rider versus the $126,299 for the Fiat with Income Rider, this difference will come mainly from the charges for the income rider. So the big question for Jack and Jill is are they looking for safety and certainty that will let them sleep well at night? In this case, they might go for the fiat with the income rider and lock in right now already the guaranteed income per year starting in year eight of $12,796. Or are Jack and Jill trying to maximize the potentially available capital at the end of year seven? In this case, they might go for the normal fiat without an income rider as the surrender values might be higher if they don't have to pay the annual income rider charge. We saw this in our example here when we compared the $138,041 for the FIA without an income rider versus the lower $126,299 for the FIA with the income rider in the most recent 15-year period scenario. However, if Jack and Jill choose the normal FIA with no income rider, they have to be prepared for whatever market conditions might be at the end of year seven when they want to use their capital to buy a guaranteed lifelong income. For example, with a SPIA, their future guaranteed income stream might be higher, lower, or the same as the $12,796 the FIA with an income rider would have locked in at the point of signing already. And of course, only the fiat with an income rider would have given them the guaranteed 9% annual roll-up rate for the first seven years. These extra $63,000 for the final growth spurt in Jack and Jill's benefit base or income base during the last year's before retirement that may be the extra icing on the cake for some in our Diamond Neste community. As we mentioned earlier, please keep in mind that all examples, numbers, and calculations in this video are for illustration purposes only and not recommendations or reflective of actual situations. And this may be particularly so in this illustration, as the most recent 15-year period was one of the strongest ever for the SP 500. There's no guarantee that the surrender values here and here that are based on the most recent 15-year period of the SP 500 as per June 5th, 2026, will be reflective of the actual non-guaranteed surrender values that Jack and Jill may potentially get from their fiat in the end. And if you want to see what the numbers might look like for you at this golden fiat moment in time, whether with an income rider or without, email us at jenniferdiamonestic.com so that we can connect you with our trusted annuity specialist who can run the calculations for your individual situation. Always remember that your personal rates and conditions will depend on a number of factors, including your age, state of residence, and so on. Your personal rates and conditions will not be locked in before you sign your annuity contract. Or check out this deep dive from last week here if you want more details into how fixed index annuities work, what income riders are, and why we would personally opt for a fiat with an income rider if we were in Jack and Jill's shoes. I've also linked this deep dive video below for your convenience. 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, very soon with more brand new wealth building content for your financial journey.