Many outside factors impact our ability to save and make money, and retirement savings are typically wrapped up into products that are affected by positive and negative market trends. So, it’s a good thing that there’s no magic formula for securing your retirement future because it means that tried and true ways of saving and investing will likely keep you steady. Regarding your nest egg, time and diversification are your best friends. And while 2023 has already seen its share of unpredictable events, consistency, patience, and steady growth products such as Fixed Indexed Annuities (FIAs) can help you reach your long-term savings goals.

Multiple factors are affecting how our savings are growing or shrinking this year. Here are some things you may be familiar with¹:

• Inflation. In the Federal Reserve’s effort to control inflation, interest rates rose throughout 2022 and just recently in March 2023. The higher the interest rates are, the more expensive it is for consumers and businesses to borrow money. That can slow down growth and earnings. In turn, stock prices go down as well.
• The labor market. When employment is high, typically, the stock market does well. While the current unemployment rate has been steady at 3.6% since February 2023, we’ve seen layoffs early this year in tech companies such as Salesforce, Google, and Amazon.
• China’s post-COVID reopening. As one of the world’s largest economies, how quickly China can return to pre-COVID production levels impacts the global supply chain.
• Russia-Ukraine war. The economic impact of the war has impacted energy costs across Europe. Also, Ukraine supplies more than half of the world’s semiconductor-grade neon—a crucial component of computer chips.
• Deglobalization. While globalization has proven how countries are interdependent, deglobalization—which focuses on insourcing and investing more domestically—will affect foreign relations.

All the above factors are currently affecting your retirement portfolio. And while we can’t control geopolitical factors, an FIA is an example of a product that can help stabilize your savings during uncertainty. Benefits of an FIA include:

• Protection from market downturns: An FIA is a contract between you and an insurance company. You agree to pay for it in either a single lump sum or multiple payments over time in exchange for the insurance company assuming the risk of market downturns to protect your annuity value.
• Low-risk wealth accumulation: An FIA uses a unique formula to calculate annual interest based on the performance of a stock, bond, or commodity index. However, the index is used only as a benchmark, and you don’t invest in it. Your earnings rates always remain between the interest rate floor and the cap—earnings never fall below zero, even if the index goes way down. This way, FIAs can provide better opportunities for accumulation versus other low-risk alternatives like CDs.
• Lifetime guaranteed income: As part of your contract when purchasing an FIA, the insurance company promises to make payments from the annuity to you in a single or series of payments over a fixed number of years. Only annuities can guarantee lifetime income regardless of how long you live.

¹Money. “Here’s What Investing Experts Are Watching In 2023,” Jan. 2023.