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What to know before you buy one

Published

9 months ago

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Investors who want to benefit from stock market gains but limit the impact of its losses are increasingly turning to registered index-linked annuities.

Like other annuities, RILAs are insurance contracts that involve handing over money in exchange for a payout, often at a later date. As the name suggests, a RILA’s performance is based on a stock market index (or multiple indexes). They come with limits on both the loss and growth sides.

“It’s like putting bumpers in a bowling lane — you’re limited on both sides,” said certified financial planner Jessica McNamee, founder and wealth management advisor for Sirius Wealth Strategies in Bellefontaine, Ohio.

Sales of RILAs reached an estimated $20.6 billion in the third quarter, a 20% jump from the same period in 2024, according to recent research from LIMRA, an insurance and financial services trade group.

This year through Sept. 30, sales were 18% higher than the same time last year, at $57.3 billion. LIMRA expects sales to exceed $80 billion in both 2026 and 2027, said Keith Golembiewski, assistant vice president and head of LIMRA annuity research.

“With a growing number of income solutions and downside protection features … RILAs have become more appealing to a wider range of clients,” Golembiewski said.

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The growth comes as the stock market has continued its upward climb over the last several years, with the major stock indexes posting double-digit yearly gains. The S&P 500 index, for instance, has climbed more than 85% since mid-October 2022. Some financial advisors are recommending that investors rebalance their portfolios and evaluate their risk tolerance in case there’s a market correction or worse.

“We are later in a bull run cycle,” McNamee said. “As time goes on, the potential gain from this bull market is diminished and the potential risk of a prolonged market dip is increased. I think clients are thinking, ‘How long can this [bull run] continue?'”

At the same time, investors who are still accumulating their retirement savings need exposure to the market if they want returns that beat inflation — and a RILA can help with that.

But they aren’t without risk. Here’s what to know before you buy.

Caps blunt market gains, too

Remember that those bumpers don’t just affect losses: “Your losses are limited to some extent and the gains are limited to some extent,” McNamee said.

While the specifics vary among RILAs, here’s an example: Say a RILA is based on the S&P 500 index and comes with a 15% downside limit and a 15% upside cap. If the S&P drops 8%, you won’t incur the loss. But if it slides by 19%, you’d see a 4% loss (the amount greater than the 15% loss limit).

On the gain side in that situation, if the market jumps by 20%, you’ll only see a 15% gain.

Using multiple indexes can help diversify holdings

You can choose the length of the RILA contract — say, one, three or six years. There are also variations in the specifics of your loss limit and gain caps — both are generally larger the longer the contract — as well as the market index or indexes you choose to base your contract on.

Using more than one index in your RILA can help diversify your money. For instance, say you allotted 70% to the S&P index and the other 30% to a broad-based international index, McNamee said.

“If U.S. stocks go down but the rest of the world’s stocks are fine, that [index mix] helps to mitigate potential losses because we’re diversifying,” she said.

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One appealing aspect of RILAs is that they generally come with no fees. There’s no up-front sales charge when you enter the contract, nor are there investment fees — because even though your returns are based on the performance of an index, you don’t own the index, McNamee said. 

Even with downside protection, review risk tolerance

These annuities are not without risk. 

For instance, McNamee said, a RILA that covers up to 25% on the downside may seem generous, but history shows it can be worse: In the Great Recession, from late 2007 to early 2009, the S&P lost more than 50%.

“I remind clients that we could experience that again,” McNamee said. “It is possible for the index to fall more than that and you could lose money.”

In other words, it’s important to consider your risk profile before buying a RILA, she said.

“The client needs to analyze whether or not the allocation to an index is appropriate for their risk tolerance, even with the downside protection,” McNamee said.

Accessing money early can be expensive

Additionally, it’s important to remember that you are generally locking up your money for the duration of the RILA. If you withdraw money from the annuity before the contract ends, you may pay what’s called a surrender charge.

Some RILAs let you withdraw up to a certain amount yearly (say 10%) but will apply that surrender charge to any withdrawals beyond that limit, McNamee said. Those charges generally start out higher at the beginning of the contract (say, 8% of whatever you take out) and gradually get lower over the course of the RILA.

Beyond that lack of liquidity, it’s important to remember that RILAs, like other annuities, are subject to the same age-related withdrawal limitations as other retirement savings.

“The biggest mistake I see people make with annuities is they don’t realize that even if it’s funded with non-IRA money, it is still a retirement account,” McNamee said. 

So if you take money out before age 59½, you may be subject to a 10% early withdrawal tax penalty from the IRS.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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