Indexed options balance a company's relative stock market performance against its absolute gains.

FORBES: How To Salvage Stock Options

Explaining the mechanics of indexed options can also be complex.

FORBES: How To Salvage Stock Options

Indexed options work similarly to traditional stock options, with one exception: Rather than having the exercise price fixed at the market price on the date of grant, the exercise price varies based on the change in an appropriate stock market index, e.g.

FORBES: How To Salvage Stock Options

Because indexed stock options pay primarily for out performance, they are highly leveraged.

FORBES: How To Salvage Stock Options

Switching from plain vanilla to indexed stock options, in particular, focuses top executives on making their company outperform competitors and the market as a whole, which would better serve to align executive and shareholder interests.

FORBES: Magazine Article

If some day you do reach the happy position of achieving your retirement savings objectives, you can reduce stress even further by putting some of that money into a low-cost annuity that will guarantee you a certain level of income for the rest of your life (options that cover a surviving spouse, or are indexed for inflation, are available but reduce annual income).

FORBES: Retirement