Retirement Income Planning
S&P 500 vs. a Participation-Rate Strategy
See how the S&P 500’s actual 30-year history compares to an indexed annuity crediting strategy that trades some of the upside for a floor that never lets a down year cost you money.
What’s a participation rate, in plain English?
A fixed indexed annuity (FIA) doesn’t invest your money directly in the stock market. Instead, an insurance carrier tracks an index — here, the S&P 500’s price movement only, not its dividends — and credits your account a share of the gain in years the index is up. That share is your participation rate. In years the index is down, you’re credited 0% — never a loss. Some contracts also cap the maximum you can be credited in any one year, win or lose.
Adjust the strategy
1996–2025, S&P 500 actual history — adjust freely.
S&P 500 ending balance
$1,846,237
10.2% CAGR
FIA ending balance
$2,023,993
10.5% CAGR
FIA advantage
$177,756
FIA ends ahead of the S&P
Worst single year
-38.3%
S&P 500 price return, 2008. FIA floors at 0%
Growth of $100,000, 1996–2025
Hover any point on the chart to see that year’s balances and returns.
This is one strategy, illustrated one way. See how a floor-and-cap approach could fit inside your own retirement income plan.
Year-by-year data
Every year’s return, credited rate, and both running balances.
Important information
Annual price and total returns for 1996–2025 are derived from SPY (S&P 500 ETF) year-end pricing as a proxy for the index; figures are close to, but not identical to, official S&P Dow Jones Indices data. This is an educational illustration, not a projection, quote, or offer. Actual indexed annuity contracts vary by carrier and product. Participation rates, caps, spreads, floors, and fees all differ and can change annually. Past S&P 500 performance does not predict future results.
Losing years shown reflect the S&P 500’s actual total-return history (6 of the last 30 years were negative); the FIA strategy modeled here has 0 losing years by construction, since crediting is floored at 0%.