A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Donato Wealth Management, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Donato Wealth Management
(512) 833-6557


10 Myths About Annuities You Shouldn’t Believe

While annuities have long been a viable retirement option, those new to retirement planning may discover a bit of misinformation about them. If you’re considering annuity-based products—such as fixed index annuities—as a way to boost the diversity of your retirement portfolio, it’s important to separate misconceptions from reality. Here, we’re busting 10 myths about fixed index annuities (FIAs) by providing the facts.

Myth 1: FIAs are only viable if you have a large principle

Reality: Once you decide an FIA is right for you, many contracts can be started with as little as $5,000. The key is to meet the minimum requirement and include as much nest egg as makes sense to achieve your financial goals.

Myth 2: FIAs are tax-free

Reality: FIAs are tax-deferred, meaning you won’t pay taxes until you begin making withdrawals. At that point, the money you earn from your FIA will be taxed like normal income. Ask your tax advisor about the impact of FIAs when researching your retirement options.

Myth 3: Monthly FIA payments are the same as withdrawing from your retirement accounts

Reality: FIAs offer the benefit of steady lifetime income with minimum guaranteed interest credits. It is one of the only retirement products that can help ensure you will not run out of money and will have a steady income for the length of your entire retirement. You cannot “outlive” your money with an FIA, which is different than drawing down another product.

Myth 4: FIAs are too complicated

Reality: All financial products should be reviewed by a trusted financial professional. However, FIAs offer clear benefits of continued growth, a steady income stream and assurance that market downswings won’t affect your principal.

Myth 5: FIAs are risky

Reality: While no retirement product can guarantee zero risk, FIAs protect your principle from the uncertainty of market volatility. Earnings never fall below zero, even if the index goes down.

Myth 6: Your premium is “locked up” and inaccessible

Reality: FIAs are appealing because they can transform retirement savings into predictable income. Your nest egg is protected from downturns, and many FIAs have riders or provisions to allow some liquidity when you need it most.

Myth 7: FIAs have little or slow growth, so there’s no benefit

Reality: It’s true you’ll be giving up some potential upside when deciding on an FIA. On the flip side, FIAs protect your principle form market downturns, while continuing to give you interest credits.

Myth 8: FIAs will prevent me from benefitting from strong stock market growth

Reality: FIAs are one tool among many to help you prepare for retirement, and the strongest portfolios include a diverse range of options. FIAs are designed to provide foundational savings so you can have an income source to pay for bucket list items or to cover routine lifestyle costs, should your other investments take a hit from market swings.

Myth 9: I don’t need an FIA unless I’m already retired

Reality: FIAs are a great tool to use when planning for retirement. As a result, younger generations are considering these products as part of their overall portfolio, due to its offerings of growth and balance.

Myth 10: Companies keep the value of FIAs upon death

Reality: FIAs can allow proceeds to go directly to a beneficiary in the case of a death. You can even choose to set up your annuity as “joint life” in order to provide you and your spouse guaranteed income for life, no matter how long each of you live.

Still have questions? We’ve got answers. Check out our extensive list of resources designed to help you prepare for retirement.


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Or give us a call at (512) 833-6557

Investment advisory services are offered through Foundations Investment Advisors, LLC and is a SEC registered investment advisor.

Investment advisory services are offered through Donato Wealth Management and is a SEC registered investment advisor.