AnnuitalSee how a 9% cap, 0% floor annuity would have performed — no math, no signup.
S&P 500 (raw)
$1,000,000
−$187,748 over 5 yrs
CapLock FIA
$1,000,000
+$266,825 over 5 yrs
The market lost $187,748. You lost $0 — and gained $266,825.
Historical backtest using real S&P 500 calendar-year price returns. Not a guarantee of future performance. See full methodology on the FIA Calculator page.
The Annuital Crash Test is a free historical backtest that shows exactly how a $1,000,000 fixed indexed annuity with a 9% annual cap and a 0% floor would have performed during the three worst market crashes of the past 25 years — the Dot-Com crash, the 2008 Financial Crisis, and the COVID crash — compared to leaving the same $1,000,000 invested in the raw S&P 500.
A fixed indexed annuity (FIA) credits interest based on the performance of a market index like the S&P 500, but with two critical boundaries: a cap on the maximum annual gain (9% on the Oceanview CapLock FIA) and a floor on the maximum annual loss (0%, meaning your account never goes down). When the market crashes, your annuity credits 0% instead of a loss. When the market rises, you share in the gains up to the cap. This is the core of defined outcome investing — you know your worst case before you invest.
During the 2008 Financial Crisis, the S&P 500 lost roughly 38% in a single year. A retiree with $1,000,000 in the market saw their portfolio drop by hundreds of thousands of dollars — and if they were withdrawing money to live on, those losses were locked in permanently. The same $1,000,000 in a 0% floor FIA would have lost nothing that year, then resumed growing when the market recovered.
The Dot-Com Crash (2000–2002)
The S&P 500 lost value three years in a row as the tech bubble burst. A $1,000,000 investment in the raw index shrank, while a 9% cap, 0% floor FIA avoided every down year and captured gains in the recovery — finishing the five-year window ahead.
The 2008 Financial Crisis (2004–2008)
The worst single-year drop in modern history — the S&P 500 fell nearly 38% in 2008 alone. This is the era where a 0% floor matters most: the raw index ended the five-year window underwater, while the FIA grew steadily by skipping the crash and crediting gains in the up years.
The COVID Crash (2020)
The fastest crash in history — and the fastest recovery. The S&P 500 plunged roughly 34% in 33 days, then roared back to record highs. This is the one era where the raw index outpaced the capped FIA, because the cap limited the FIA's upside during the explosive recovery. It's an honest reminder that a cap trades some upside for total downside protection.
The interactive simulation above tests three multi-year crash windows. But some of the most devastating market damage happened in a single calendar year. Here are the five worst one-year S&P 500 price declines over the past 35 years — and what a 0% floor fixed indexed annuity would have credited instead.
| Year | Event | S&P 500 (1-yr) | FIA (0% floor) |
|---|---|---|---|
| 2008 | Financial Crisis | -38.49% | 0% |
| 2002 | Dot-Com Crash (Year 3) | -23.37% | 0% |
| 2022 | Inflation Bear Market | -19.44% | 0% |
| 2001 | Dot-Com Crash (Year 1) | -13.04% | 0% |
| 1990 | Gulf War Recession | -6.56% | 0% |
In every single crash year, the raw S&P 500 lost money. A fixed indexed annuity with a 0% floor credited 0% — no loss, no gain — and resumed capturing upside the moment the market recovered. That's the difference between a -38% hole to climb out of and breaking even.
If you're still working and the market crashes, you have time to wait for a recovery — you're not selling shares to pay for groceries. But if you're retired and withdrawing from your portfolio, a market crash early in retirement can be devastating. You're forced to sell more shares at lower prices to raise the same dollar amount. Those shares are gone for good — even if the market recovers a year later, you've already locked in the losses. Financial planners call this sequence-of-returns risk, and it's the single biggest threat to a retiree's portfolio.
A fixed indexed annuity eliminates sequence-of-returns risk. Your principal is protected from market losses, so a crash early in retirement doesn't force you to sell shares at the bottom. Your safe money stays safe, and your growth money — the portion you choose to keep in the market — has time to recover.
The Crash Test doesn't pretend a capped FIA always beats the raw S&P 500 — it doesn't. Over long stretches of uninterrupted market growth, the raw index will outperform because the 9% cap limits your gains in blockbuster years. The FIA's advantage shows up precisely when it matters most: during the crashes that can derail a retirement. The question isn't whether an FIA beats the market over 30 years. The question is whether you can afford a 38% drop the year after you retire.
What is a market crash test for annuities?
A market crash test is a historical backtest that compares how a fixed indexed annuity would have performed against the raw S&P 500 during the worst market downturns. Annuital's Crash Test simulates a $1,000,000 investment through the Dot-Com crash, the 2008 Financial Crisis, and the COVID crash using real S&P 500 calendar-year price returns and a 9% cap, 0% floor indexed annuity model.
Does a fixed indexed annuity protect against market crashes?
Yes. A fixed indexed annuity with a 0% floor cannot lose value when the market falls — your principal is protected. During the 2008 Financial Crisis, the S&P 500 lost roughly 38% in a single year, but a 0% floor FIA would have credited 0% that year instead of a loss.
What is the cap and floor on an indexed annuity?
The cap is the maximum interest the annuity can credit in a single year — the Oceanview CapLock FIA uses a 9% annual cap. The floor is the minimum — typically 0%, meaning your account never loses value even when the index is negative.
How did a fixed indexed annuity perform during the 2008 financial crisis?
During the 2004–2008 window that includes the 2008 crash, a $1,000,000 investment in the raw S&P 500 would have ended at roughly $812,252. The same $1,000,000 in a 9% cap, 0% floor FIA would have grown to approximately $1,266,825 — because the 0% floor prevented down-year losses while the cap captured gains in the up years.
Can a fixed indexed annuity beat the S&P 500?
Over the best 5-year windows the raw S&P 500 typically outpaces a capped FIA because the 9% cap limits large gains. But during volatile or negative periods — including the Dot-Com crash and the 2008 Financial Crisis — the FIA's 0% floor and locked-in gains can leave it significantly ahead.
Is the crash test a guarantee of future annuity returns?
No. The crash test is a historical backtest using real S&P 500 calendar-year price returns from 1988 through 2024. Past index performance does not predict future results. Actual contract crediting may differ by terms, cap, participation rate, and state.
Why can't retirees afford a market crash?
Retirees in drawdown are selling shares to fund living expenses. When the market crashes, they sell more shares at lower prices — a problem called sequence-of-returns risk. A market crash early in retirement can permanently deplete a portfolio even if the market recovers later.
What is defined outcome investing?
Defined outcome investing means you know your worst-case and best-case returns before you invest. A fixed indexed annuity sets a floor (your worst case is 0%) and a cap (your best case is 9% per year), removing the guesswork and market anxiety from retirement savings.