A Fixed Index Annuity is a key component of a balanced retirement portfolio that offers upside growth potential with a minimum fixed rate guarantee. The annual growth is linked to a stock market index such as the S&P 500, but the money is never actually invested in the stock market. Gains are usually capped because the insurance company assumes ALL the risk with this type of annuity. You cannot lose ANY of your principal or earnings. FIAs are a great option for people who want the potential for lifetime income, and want to protect their retirement nest-egg from losses due to stock market declines.