A Secure Retirement Account is a unique product of the life insurance industry that offers clients the opportunity to save and accumulate money on a tax deferred basis for retirement, and then receive a guaranteed income stream during retirement or for the rest of their lifetime.

The key to understanding the basics of Secure Retirement Accounts, is to understand the different ways in which they are typically categorized.

The two most common ways to categorize Secure Retirement Accounts are by:

1. Timing – Immediate Vs. Deferred (when will income payments begin)
   
   In an Immediate Secure Retirement Account, a person gives a lump sum of money to an insurance company in exchange for a stream of income payments that begin immediately.
   
   In a Deferred Secure Retirement Account, a person will typically fund the account over time, usually by making contributions or deposits throughout their working career.  The income payments do not begin until a future date, usually at the start of their retirement
    
2. Interest Rate – Fixed Vs. Indexed (how interest growth is credited)
   
   A Fixed account refers to the fact that the rate of return that a person earns within the contract is either guaranteed by the insurance company, or is earned and credited on a consistent, predictable basis throughout the life of the contract.
   
   Indexed accounts are technically fixed accounts, since they contractually guarantee the safety of the client's principal; however, they give the client the ability to index their gains to a particular stock index instead of receiving only the standard fixed interest credit offered by traditional fixed accounts.  The attraction to the investor is that indexed accounts can provide opportunities to enjoy higher growth potential than traditional fixed accounts, while still protecting their principal against  downside market risk.  

Insuring Your Assets

You insure your house, your car, your health and your life - why not your retirement portfolio?  Your retirement portfolio's ability to stay safe and generate income during retirement is what allows you to afford to maintain living the same lifestyle you had before retirement.

When your money is deposited with either a fixed or fixed indexed retirement account, your principal and interest are contractually guaranteed in writing and backed up by the full strength and claims-paying ability of the insurance company.  These investments have a built in "floor", meaning, for example, if you have chosen to have your portfolio aligned with the S&P 500, even if that index goes down, your portfolio is guaranteed to not lose money. The built in "floor" is 0%, so if the index goes down, your portfolio earns 0%, however, if it rises your portfolio rises with it.