What 30-Years of S&P 500 Returns Reveal - And How a 10%-Cap Index Annuity
Quietly Beats Bonds
When people ask whether an index annuity is "worth it", they're usually trying to understand the trade-off:
You get interest when the market goes up - but only to a cap - and you never lose money in a down year.
That sounds simple, but the real question is: How does it actually play out over time?
To answer that, I analyzed the past three decades of S&P 500 annual returns and compared:
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How often the index was positive for the year
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How $100,000 would have grown in the S&P 500 index over a decade (2016-2025, 2006-2015, 1996-2005)
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How $100,000 would have grown in an Index Annuity with a 10% cap over those decades
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And - here is a surprise - how the Index Annuity stacked up against Bonds (as represented by the Aggregate Bond Index)
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These results are important to retirees across Northwest Ohio. Many of whom may own a lot of bonds in "balanced" and "target date" mutual funds.
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Each decade's results are summarized below.
2016-2025: A decade of big ups & downs
For this decade the S&P 500 stock index had eight years of gains.
S&P 500: $100,000 grew to ~$263,000
10%‑Cap Index Annuity: $100,000 grew to ~$196,000
The market had several huge years (20%+, 30%+), which the annuity capped at 10%.
But the annuity avoided the –4% and –18% losses in two years entirely.
Bond comparison:
The Agg had two negative years in this decade — including its worst year ever. Bonds grew to $121,700. The annuity beat bonds by a wide margin of over $70,000.
2006-2015: The Financial Crisis and the Recovery
For this decade the S&P 500 stock index had eight years of gains.
S&P 500: $100,000 grew to ~$187,000
10%‑Cap Index Annuity: $100,000 grew to ~$183,000
This decade included the unsettling 37% loss of 2008.
The annuity loss nothing that year and compounded steadily throughout the decade.
Bond comparison:
The Aggregate Bond index did fine in the crisis, growing to $155,000. But their decade long compounded return still trailed the annuity's 6.3% annualized growth.
1996-2005: The Tech Boom, Tech Bust, and Rebound
For this decade the S&P 500 stock index had seven years of gain.
S&P 500: $100,000 grew to ~$215,000
10%‑Cap Index Annuity: $100,000 grew to ~$175,000
The late 1990's stock market boom produced enormous returns the annuity couldn't capture.
The annuity did avoid the three-year dot.com crash entirely.
Bond comparison:
The Aggregate Bond index had several flat and negative years during this decade. The annuity's steady compounding again came out around $12,000 ahead.
Why This Matters to Retirees Across Northwest Ohio
1. The annuity eliminates losses
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Bonds had multiple negative years - including historically bad ones.
The index annuity had zero.
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2. The annuity compounds steadily
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It's decade long results all clustered tightly between $157,000 and $176,000.
Bonds were far more erratic.
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3. The annuity performs like a "super bond"
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It delivers:
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There is no obligation to receive personalized information showing how a Fixed Index Annuity can grow over time - or how the same annuity can produce income for you today - just use the link below.