Can I Lose Money In My Annuity? Ask Beau

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Ask Beau | Can I Lose Money In My Annuity?  


My financial advisor set me up with an annuity that he said will give me a guaranteed income. I was talking to my neighbor about this and she said that annuities are terrible – that they can lose you money and have all sorts of high fees. Is she right? Can I lose money in my annuity? Help! My number one concern is that I don’t lose any money.


Annuities can be a real nightmare or a great financial tool depending on your situation and the annuity you choose. The reason for this confusion is simple: there are different kinds of annuities. If your main goal is to protect your money, then you want an annuity that has principal protection. What that means is the amount you put in your annuity is guaranteed not to go down due to stock market loss. If your goal is to earn income, annuities can do that, too. It all depends on what kind of annuity you choose.


Here is what you need to know:

  • Fixed annuities, Indexed annuities and Fixed Indexed Annuities (also known as FIAs and EIAs) have principal protection and are guaranteed to NOT lose money in the stock market.
  • The kind of annuity that can lose money in the stock market is called a Variable Annuity.
  • With a Variable Annuity, your principal is at risk.
  • A Variable Annuity can go down in value.
  • Variable, fixed and indexed annuity can all provide you with structured income payments.

Here is what you need to ask your financial advisor:

  • Is the principal investment in my annuity guaranteed not to lose money?
  • What are the fees associated with my annuity?
  • When can I access the money in my annuity without surrender charges?
  • What is my guaranteed income?
  • How is the money in my annuity protected?


While there may be situations when a variable annuity is desired, fixed and indexed annuities provide the most protection if market loss and guarantees are your number one concern. Annuities are sold through insurance companies. The guarantees of the annuity contract are protected and guaranteed by the claims paying strength of the insurance company. Most states also have guaranty associations that provide additional protection supported by the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA).


Make sure you understand what you are getting before you buy. If you already purchased an annuity and don’t exactly know what you have, contact us at with your questions. We’re happy to give your annuity contract a review.

Bottom line: Some annuities can lose money while others cannot.

Do you have a question about success with money, your business, or life? You can ask Beau anything by visiting and sending your question(s) in to RichLife HQ!

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