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When you think about annuities, most people assume you have to give up growth in order to stay safe. But that’s not always true. Some annuities can give you a strong chance for growth and protect your principal at the same time.

One example is a five-year fixed index annuity that offers up to 13.25% growth potential with zero principal risk. Let’s look at how it works and when this type of annuity might fit your plan.

A Safer Way to Grow Your Money

This particular annuity comes from IBE Life and Annuity Company, which has an A rating and a long history of solid customer service. The company offers flexible fixed index annuities (FIAs) with no fees, 10% penalty-free withdrawals after the first year, and several term lengths—five, seven, or ten years.

For 2025, the five-year version stands out because it offers:

A 9.5% bonus added to your account value on day one.
No fees or hidden charges.
Up to 13.25% growth potential depending on how you set your floor.
Full protection of your principal against market loss.

That combination makes it a unique short-term option for people who want safety, flexibility, and growth all in one place.

How the Flooring Method Works

Most fixed index annuities credit interest based on how the market performs. If the market goes up, you earn interest up to a certain cap. If it goes down, you earn zero—but you never lose money.

IBE’s annuity adds another layer of flexibility through what they call a flooring method. Instead of risking your principal, you can choose to risk a portion of your interest gains for a higher potential return.

Here’s what that looks like:

Floor Choice	Risk You Take	Growth Cap on S&P 500
0% Floor	No risk to any gains	5.75% cap
15% Floor	Risk up to 15% of your interest gains	13.25% cap

No matter which option you choose, your principal is fully protected. Even if the market crashes, you’ll never lose your starting balance.

Why a 5-Year Term Matters

Not everyone is ready to commit to a lifetime income plan. You might be waiting for an inheritance, selling property, or just not ready to lock in your money long-term.

A five-year annuity gives you:

Short-term flexibility — your funds are available after five years.
Market protection — you can pause withdrawals if markets drop.
A safety net — your income can continue even if the market dips.

It’s a way to take your retirement planning in manageable chunks. You can plan for the next five years, then reevaluate when the contract ends.

A Real-World Case Study

Let’s imagine a couple with $1 million in savings, all invested in the market. They need 4% income each year and expect 2.5% inflation growth.

Here’s what happens if they face a market downturn early in retirement:

Scenario	5-Year Market Return	Ending Balance After 5 Years
All in Market	Market drops 40% early	~$600,000 (only 60% left)
50% Market / 50% IBE FIA	Market drops 40%, FIA earns interest	~$852,000 (85% left)

By keeping half their savings in the annuity, they can draw income from the protected portion while the market recovers. After five years, they have $250,000 more than the all-stock approach—and they never risked their principal.

Why Protection Matters More Than Hype

It’s easy to get caught up in returns and bonus numbers, but annuities aren’t designed to make you rich. They’re designed to keep you from losing what you’ve already earned.

When markets go up, you can capture a portion of the growth. When they go down, you don’t lose your savings. That’s the real purpose behind fixed index annuities—steady, protected progress.

The Big Takeaway

An annuity with 13.25% growth potential and zero principal risk isn’t about chasing the biggest number—it’s about building a smarter safety net. It gives you a way to grow your money while avoiding the kind of losses that can derail your retirement.

If you want to see how this strategy might fit your situation, visit AtlasAnnuity.com to watch my free video series or schedule a short call. Together, we’ll make sure you make the right annuity decision the first time—without needing to become an expert.