As interest rates hover at all-time lows, demand for safe money options has been taking a hit. Proof of this can be seen in the recent LIMRA report which showed that fixed annuity sales dropped 14% in the second quarter of 2012 on a year-over-year analysis. This drop in demand is simply due to the belief that rates are much more likely increase than to decrease going forward. At the current level, it is hard not to have this belief.
So what safe money options are available which can overcome a potential interest rate jump? According to an informative article written by Cary Carney, fixed indexed annuities can be a fantastic option for having guaranteed principle protection with opportunity for increases in value if its respective index increases in value. Please be sure to read her article (click here) if you would like to learn exactly how these fixed indexed annuities can help decrease the risk to your safe money due to potential rising interest rates. Her theory can certainly be seen in recent sales trends which show that fixed indexed annuity sales have been on the rise. In fact, fixed indexed annuity sales increased by 6% in quarter 2 of 2012 while all other annuity types showed slumping sales.
Please be sure to seek guidance from a retirement planning specialist to determine which type of offering would be the optimal fit for your particular needs.