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Fidelity & Guaranty Life Retirement Pro Annuity Review

Fidelity & Guaranty Life Retirement Pro Single Premium Annuity Review

This review will show you the strengths and weaknesses of the Fidelity & Guaranty Life Retirement Pro Single Premium Fixed Indexed Deferred Annuity. We will walk through features, potential returns and the details of how Fidelity & Guaranty Life Retirement Pro works, so that you can know what to expect. As with all annuities some aspects work well, and others work poorly. Therefore, to make an informed decision it is important to consider all available facts. This annuity has the horrible features that drive me to create these reviews to help retirees educate themselves before they buy. The income base versus cash value components are very misleading with this annuity as you’ll learn throughout this review.

In this review we’ll cover:

  • Product Type
  • Fees
  • Investment options that are available and their realistic long-term investment return expectations
  • Understanding the income rider
  • Understanding the death benefit
  • How it can best help your financial plan
  • How it’s most poorly used as part of your financial plan

Fidelity & Guaranty Life Retirement Pro Quick Facts

Product NameF&G Retirement Pro
IssuerFidelity & Guaranty Life Insurance Company
Type of ProductFixed Indexed Deferred Annuity
Standard & Poor’s Rating“BBB+” (Good)
Phone Number1-888-513-8797
Websitewww.home.fglife.com

Before we go into detail, here is an important legal disclosure.

This review of the Fidelity & Guaranty Life Retirement Pro Annuity is an independent review at the request of readers. Intended to explain my perspective when breaking down the positives and negatives of this model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Fidelity & Guaranty Life Pro Annuity has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence. Consult a properly licensed professional, should you have specific questions related to your circumstances. This review is not intended to give specific advice. Your adviser may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.

Information about Fidelity & Guaranty Life

Fidelity & Guaranty Life is an insurance holding company that helps middle-income Americans prepare for retirement. In the workplace, Fidelity & Guaranty Life strives to create a culture that rewards engagement, teamwork, and results. They focus their efforts on activities that benefit the long-term interests of policyholders, shareholders, and the community. Fidelity & Guaranty Life along with its employees are 100% dedicated to giving back to the community through charitable donations and volunteer work.

In addition to financial support for the community, employees enjoy giving their time toward worthy causes in the cities where they work. The Baltimore community has participated in the annual “Rebuilding Together” project for many years. Wherein employees and their families volunteer time and materials to refurbish Baltimore area homes for needy families in the community. In Iowa, FGL employees have participated in volunteer events such as packing meals for Meals from the Heartland. Employees ship meals all over the world and are a reason in fighting starvation and hunger.

You can learn more about this from www.home.fglife.com

How do Agents Typically Pitch This Product?

  • A way to make a high level of guaranteed lifetime income
  • A 7% upfront bonus
  • Guaranteed growth with market upside potential
  • No risk of market loss
  • Double-digit benefit-based caps that give higher income potential
  • Increased growth potential from a next generation guaranteed withdrawal feature
  • 10% guaranteed growth

Is any of this True?

Things aren’t always what they seem on the surface!

From what I see the high cap is in the income base only, but the cash value (Account Value) cap is very low and it seems misleading.

When looking further into the details there is a double-digit cap interest rate cap credited from the Index, however, this is only credited to the Benefit Base and not the Account Value. The Benefit Base is not cash or a value surrendered or withdrawn. The truth is that the real returns are very low with this annuity. The Minimum Fixed Guaranteed Interest Rate on the Account Value is only 0.25% and the Annual Withdrawal Amount Guaranteed is around 3.3% annually. Therefore, like with the earlier B- rated F&G annuities that we’ve discussed, its return is lower than perceived.

However, it does have a strong Death Benefit feature, if the annuitant passes away then the beneficiaries receives the income base. Which over time, that income base grew with the index (14% cap rate) as the death benefit. While the death benefit may fit your goals, it’s important to consider the benefits to you if you live an average or longer life.

A question to ask yourself is…

“Will this annuity combine with your other assets to give you the returns you need to support your lifestyle?” This is what Retirement planning annuity analysis is all about.

My goal is to help you understand more about the details and exactly what you can expect, so you can see deeper into an overly simplified sales pitch. So, let’s walk through the details beginning with the Premium Bonus.

A 7% Premium Bonus sounds great! However, what most sales agents fail to initially pitch is that there is a vesting schedule on this Premium. Meaning, that a male, age 62, with a $100,000 premium does not begin his accumulation period with an Account Value of $107,000 that grows until he is ready to begin receiving withdrawals. The vesting schedule below means that only a percentage of the premium each year earns interest. To gain interest on the full 7% bonus this male retiree would have to keep the annuity for 12 years.

Understanding the Guaranteed Minimum Withdrawal Benefit Rider and Benefit Base

The strongest part about these features is that they come with the annuity at no extra fee. Besides that, a lot of what this annuity promotes is misleading.

Let’s use our example of a male, age 62, with $100,000 to invest to further explain how this feature works.

After 5 years our annuitant would like to start receiving income. The annuitant was informed that this Indexed annuity can grow up to 14% a year with the S&P 500 annual point to point.

However as mentioned before, it is his Benefit Base that grows at this rate and not his Account Value. His Account Value is only guaranteed a growth of 0.25% annually up until his 83rd Birthday.

After 5 years of owning the annuity, the annuitant can begin his withdrawals with a guaranty of 3% a year withdrawal or $6,608 annually for 15 years. After owning the annuity for 20 years he has received only $105,728 total from his annuity. He wasn’t really earning those high base increase numbers if after 15 years he’s only received 5% more then he put in.

Double digit Benefit Based Caps that give higher income potential?

To receive credit from growth in the Benefit Base, a Breakthrough Value has to be either be met or exceeded by the Benefit Base.

The Breakthrough Factor determines the Breakthrough Value, which is 160% multiplied by the amount of the premium.

When the Benefit Base exceeds this value, the interest rate (up to the 14% cap rate) from the performance of the S&P 500 credits the following year.

In our example our annuitant has a Breakthrough Value of $160,000 (160% multiplied $100,000.) Therefore, his Benefit Base would need to exceed $160,000 in any of the policy years to receive the growth potential. The Benefit Base is above the Breakthrough Value when the cap rate on the index is at 14% and the S&P 500 performs at that percentage for at least 5 years. Considering that for the last 10 years, the average credited to the Benefit Base from the index was 8.83%, makes the chances of surpassing the Breakthrough Value or achieving any credit or growth from the index to our annuitants Account Value quite slim.

The Surrender Charge

Considering that the premium gains so little, the surrender period for the F&G Retirement Pro annuity is very long and the charges are high. Therefore, buying this annuity is a long-term commitment.

Where does it work best?

  • Producing a guaranteed pension like income stream
  • Those that are not looking to earn more than 2% on their capital
  • Those who value safety of their principal over return and can afford to underperform Inflation

Where does it work the least?

  • Those who need to outperform inflation in retirement
  • Those needing a large return on their investment
  • Those who need a return of over 2% annually

Annuity Edu’s Summary on the Fidelity & Guaranty Life Retirement Pro Annuity

Overall, Fidelity & Guaranty Life Retirement Pro has very low returns which is something to consider if you need your premium to support their lifestyle throughout retirement.

The 14% cap rate that it offers is high, but it’s important to note that it’s on the base. Once income is elected, the odds are very very low of ever getting an increase due to the horrible caps on the cash value. The 7% premium bonus is also not as it seems it is immediately vested to the Benefit Base and Death Benefit then divided over a 12-year vesting period than it being a bonus added to their premium that vests throughout their planned accumulation phrase.

Buying an Equity Indexed annuity is a long-term commitment. Especially with this annuity as its Surrender schedule is long in comparison to other annuities of this class.

To Conclude

Hopefully after reading this Fidelity & Guaranty Life Retirement Pro review you can see this double-digit lifetime income potential pitch for what it is.

It is important to test all annuities versus various others to see which one fits your goals and objectives the most. This is something we do for free here at annuityedu.com. Test the annuity and see if it is a good fit for you.

We’ll use our proprietary calculator to illustrate how this annuity will likely perform in your specific situation so you can see through the fake numbers and understand the real rate of return.

To be sure, Click here to request a complimentary, no obligation Annuitycheck® Report to test an existing annuity or an annuity before you buy. If your agent was honest with you, the numbers will match up – if not, well at least you know before you buy.

Have Questions on the Fidelity & Guaranty Life Retirement Pro Annuity? Have any comments?

If you still have questions about this annuity, or you’re an investor that’s still confused about the Fidelity & Guaranty Annuity. You can reach out to us by email. We can’t always respond right away, but we strive to respond within 24 hours.

We hope you found it helpful as you’re conducting your own research on Fidelity & Guaranty Annuity. Thank you for visiting our site.

All the best,

AnnuityEdu.com

AIG Power Select Plus Income Annuity with Lifetime Income Plus Review

AIG Power Select Plus Income Annuity with Lifetime Income Plus Review

Today’s review is on the AIG Power Select Plus Income Annuity with Lifetime Income Plus. The Purpose of this review is to show you where Power Select Plus Income Annuity with Lifetime Income Plus Annuity is strong and where it has weaknesses. In order to make an informed decision, it is important to consider all available facts.

  • Product type
  • Fees
  • Investment options that are available and their realistic long-term investment return expectations
  • Understanding the income rider
  • How it can best help your financial plan
  • How it’s most poorly used as part of your financial plan

Polaris Platinum III Annuity Quick Facts

Product NamePower Select Plus Income Annuity
IssuerAmerican General
Type of ProductFixed Indexed Annuity
Standard & Poor’s Rating“A+” (Excellent)
Phone Number1-800-445-7862
Websitewww.aig.com/individual/investments/annuities

Before we go into detail, here is an important legal disclosure.

This review of AIG Power Select Plus Income Annuity is an independent review at the request of readers. Intended to explain my perspective when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Polaris Platinum has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions related to your circumstances. This review is not intended to give specific advice and your adviser may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.

Before we go into the review, some information on AIG

Founded in 1919, American International Group, Inc. (AIG) is a leading global insurance organization serving commercial, institutional, and customers in more than 100 countries and jurisdictions

AIG provides the safety that gives companies and people the freedom to grow. They work to pinpoint risks and prevent them from becoming losses so clients are free to create the future. As well as help clients identify unseen risks, and stop accidents before they happen.

For nearly one hundred years, the organization has faced and managed complex risks. They have also provided the risk ability and financial strength that empowers 90 million clients in more than 100 countries. Today, they’re evolving to better meet client needs.

They’re simplifying their structure so that they work more closely with clients, give greater transparency and deliver value faster and more efficiently.

There are a few ways that Agents might pitch AIG Power Select Plus Income Annuity.

  • Achieve guaranteed Lifetime income
  • Obtain uncapped market growth
  • Create an inflation adjusted lifetime income
  • Receive a 10% guaranteed growth

Is any of this true?

Certainly, some of it is. But we must understand the details of how it works. To clarify, things aren’t always what they seem.

In fact, AIG Power Select Plus Income Annuity joins the class of Fixed Indexed Annuities that offers both uncapped return strategies, as well as life time income that is able to increase. These are both aspects that are very popular, and with good reason. Guaranteed Lifetime Income that is able to increase has the potential to deliver much more income over your life time than income that doesn’t increase. It does typically come with lower guaranteed values. Let’s take a look at some of the important numbers. I’ll give you my opinion on how this annuity’s uncapped strategies compared with other uncapped annuities. Uncapped Strategies and increasing income are only available through a few carriers at the moment.

Contract Year1234567891011+
Charge %109876543210

There are similar versions of this annuity product with annuity surrender schedules lower or higher than this exact model.

Understanding the Lifetime income Plus Multiplier Guaranteed Living Benefit Rider

The AIG annuities don’t have a guaranteed roll up for the income base. It does however have a 200% increase to your income base for any interest you earn. For example, if you earn 5% then it’ll credit 10% to your income base.

The strongest aspect of this annuity is the incomes ability to increase. I’ll walk through a hypothetical example from an illustration, to further explain how this works.

Scenario 1

In this example, a male, age 61, invests $100,000 in the Power Select Plus Income Annuity and plans to defer it until age 66 when he retires. Upon retirement, 10% annual guaranteed roll up is credited to him. At age 66, his account has an income guarantee of $160,000 and his lifetime withdrawal rate of that value is 5.10%. This guarantees him 5.1% or 8,160 annually for the rest of his life. That is the way he can get access to the $160,000. He cannot take a lump sum of that $160,000.

After taking lifetime income for 15 years and owning the annuity for 20 years, he has received $122,400 total from his annuity 25 years. This is under 2% annually compounded to return. Still confused? I’m going to break this down further. To further illustrate this example and guide you to make the best decision for yourself, not your agent!

In comparison, when deferring it for 5 years income, increasing by the 10% you received $122,400 back. So the defer for longer scenario yielded about 17% total income spread over a 20-year period. This is lower than the 50% implied growth from the 5 years of a 10% annual  increase!

However, if you were to live male life expectancy and do the first 15 years on the 5-year deferral scenario, then you’ll receive $81,000 in total income. Which totals about 6% more return against a 50% implied 5 years of return.

What are the uncapped investment options for AIG?

S&P Annual PTP Participation rate

MLSB: The Merrill Lynch Strategic balanced index 2-year PTP is likely the one that your agent is showing you. This is the Merrill lynch index with a 2-year PTP. Currently in most states this is the lowest spread and some of the strongest historical returns for this annuity. Typically, 2-year point to point have higher historical returns than 1-year point to point all else equal. This requires more patience but historically this has rewarded those who have been patient. This index has averaged around 6%.

As a result, I’ve seen many times an agent will recommend the 1 year. Given that they’ll likely get less return just because they know clients aren’t patient! So please ask yourself whether you can wait 2 years for a likely higher return and participation rates or whether you prefer less return.

Pimco Index

This is the highest historical returning index. Often times agents might not recommend it because it has a higher spread (spread is like a fee but only assessed when interest is positive). However, even after the spread the returns have been higher than any other index for this annuity.

For that reason, it might be best is two combine a mix of the 1-year and the 2-year to give yourself more consistency.

The BNP annual return for the best 10 years was 4.83% Annually.

This is not bad, considering interests rates are low. But if you are expecting high stock market returns, you will be disappointed. This annuities performance is similar to a bonds performance than of a stock. It also has much less downside risks and volatility than stocks.

Where does it work best:

  • Safety of principal
  • The opportunity for more index-linked growth
  • Guaranteed lifetime income in retirement
  • Increasing income potential
  • As a high-quality bond replacement as part of an asset allocation strategy

Where does it least work:

  • Trying to get a high return
  • Not looking for a guaranteed lifetime income
  • No intention to keep this for the rest of their life

Annuity Edu’s Summary on the AIG Power Select Plus Income Annuity

Overall, I think this Fixed Indexed annuity has some good features. The annuity has a strong guaranteed lifetime income especially if starting income right away compared to others in the market. The ability to double income on interest is powerful as well.

Buying an Equity Indexed annuity is a long-term commitment. It is important to test this annuity versus various others to see which one fits your goals the best. Typically, these annuities earn nowhere near the return of the guaranteed 10% roll-up income rider amount. This is something we do for free here at Annuityedu.com. Test the annuity to know if it is a good fit for you. We’ll use our proprietary calculator to illustrate how this annuity will likely do in your specific situation.

To be sure, Click here to request a complimentary, no obligation Annuitycheck® Report to test an existing annuity or an annuity before you buy. If your agent was honest with you, the numbers will match up – if not, well at least you know before you buy.

To Conclude

Unfortunately, advisers tend to underestimate how low the returns are over time, especially if choosing one of the riders. The return of Annuities is comparable to the return of a bond more than a stock. It’s about having realistic expectations and risk/adjusted basis. That’s why we can help you test the guarantee in your financial plan for the internal rate of return AIG provides and see if your plan can handle the amount of return in retirement.

Furthermore, purchasing an annuity is often an irreversible decision. You’ll have high surrender fees if you change your mind after you buy it. Surrender fees cause assets to not be used at their fullest potential.

Have Questions on the AIG Power Select Plus Income Annuity? Have any comments?

Finally, if you need clarity about the Power Select Plus Income or you have any questions and you can’t seem to find the answer here on our website [You can send us your questions here via our Free Annuity Help contact form.] You can also reach out to us by email or by phone.

We hope you found it helpful as you’re conducting your own research on the AIG Power Select Plus Income Annuity. We wish you all the best in your retirement journey!

All the best,

Annuityedu.com

National Western Life Ultra Classic 13 Equity Indexed Annuity Review

National Western Life Ultra Classic 13 Equity Indexed Annuity Review

This review is meant to show you the strengths and weaknesses of the National Western Life Ultra Classic 13 Equity Indexed Annuity. As with all annuities, they work very well doing some aspects and poorly at other aspects. I’ll walk through the details of how National Western Life Ultra Classic 13 Equity Indexed Annuity works, so you can know what to expect. This review will be on the National Western Life Ultra Classic 13 Equity Indexed Annuity without income rider.  We’ll breakdown the investment options and the potential returns.

  • Product Type
  • Fees
  • Investment options that are available and their realistic long-term investment return expectations
  • Understanding the income rider
  • How it can best help you as part of your financial plan
  • How it’s most poorly used as part of your financial plan

National Western Life Ultra Classic 13 Equity Indexed Annuity Quick Facts

Product NameUltra-Classic 13 Equity Indexed Annuity
IssuerNational Western Life
Type of ProductIndexed Annuity
Standard & Poor’s Rating“A” (Strong)
Phone Number1-877-922-9422
Websitehttps://www.nationalwesternlife.com/annuities.aspx

There are a few ways that Agents might pitch this product

  • Principal Protected Growth
  • Uncapped market upsid

Does your agent say you can get market like returns with zero risk?

The National Western Life Ultra Classic 13 Equity Indexed Annuity without the income rider is designed for accumulation. This review we’ll be straightforward. When it comes to National Western Life Ultra Classic 13 Equity Indexed Annuity it’s all about the potential for interest. That will decide whether this annuity is good for you or not.

National Western Life doesn’t show any projected returns. It’s for this reason the investment portion of this review will be valuable for you. It seems National western life doesn’t like showing the historical returns. This is strange considering all other companies I know of show some type of historical return history based on current caps and rates.

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time, we’re dedicated to helping you with a second opinion viewpoint. So to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy.

Before we go into detail, here is an important legal disclosure.

The review of National Western Life Ultra Classic 13 Equity Indexed Annuity is meant to be an independent review at the request of readers. In addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. National Western has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence. Consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances.  This isn’t meant to be specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation.  All names, marks, and materials used for this review are property of their respective owners.

Information on National Western Life

National Western Life Insurance Company® is a Colorado corporation with Executive Offices in Austin, Texas. The Company offers a full line of life insurance and annuity products in 49 states and the District of Columbia. Visit our website www.nationalwesternlife.com for all current financial information. Since its start in 1956, National Western has emphasized financial strength for the protection of its policyholders. As a legal reserve insurance company, National Western must set aside a portion of its assets equal to reserves required by law. Annually, a financial statement is filed with each state’s insurance department. 

 National Western Ultra Classic 13 Equity Indexed Annuity

 

 

 

Understanding the Surrender Charge

Contract Year12345678910111213Thereafter
Withdrawal Charge15%14.75%14.00%13.00%12.25%11.25%10.50%10%8.75%8.00%6.00%4.00%2.00%0.00%

 

National Western Life Ultra Classic 13 Equity Indexed Annuity has a long 13 year surrender. This surrender is very long especially when compared to other annuities in its class. The important aspect of the surrender is whether the Index options cap and rates are worth the long hold time.  I’ll break down the investment options and what you should expect.

Option A-

Annual Reset with Monthly Average.

Option B-

Fixed Interest 1 year 3.35.

Option D-

Annual reset with Monthly Cap   1st year cap is 2.25%.

Option J-

Annual Point to point 7% Cap.

Please check the cap rates before you buy. These are subject to change. NWL doesn’t show the historical performance so I’ve compared the caps and rates relative to other similar companies. They show the historical performance so you can see what the performance has been. You can compare it with what you’ve been told.

Option A-

This option has the best historical performance.  This option in the best base scenario should average around 5%. In the worst case, I’d expect a 10-year period to be around 3%. You’ll be disappointed if you’re expecting more than this range.

Option B-

Fixed Interest—This is 1st year only and remember NWL has a reputation in the industry of changing their rates after the 1st year.

Option D-

Annual Reset with Monthly Cap – Current rate is 2.25 1st year.  Great American Life has this exact index crediting option with a 2% monthly cap. The best 10-year return has been 2.59%. The worst 10-year period has been 2.76%.  The last 10 years has been 2.88%. The NWL life’s index crediting cap is slightly higher for the 1st year. It’s likely the returns could be slightly better but not much. If you’re being touted high returns with this annuity, then you may need to find a new advisor because they’re not being honest.

Option J-

Annual Point to Point with a 7% cap. Great American Life has the exact same indexing credit but with a 6.75% cap.  They show the best 10-year return at 4.30%, the worst 10-year return at 3.31%. The last 10-year return at 4.36%. The 7% cap will give a little more return but not much. It’s also only 7% for the 1st year.

National Western Life Ultra Classic 13 Equity Indexed Annuity

 

 

 

 

 

 

 

Where it works Best:

  • Conservative growth
  • Cash alternative
  • Looking for principal protection
  • Those who don’t mind locking in money for 13 years

Where it works Worst:

  • Those who need to return to beat inflation
  • Who want the simplicity in understanding their indexing crediting strategies
  • Those who want to maintain flexibility in retirement

Annuity Edu’s Summary on the National Western Life Ultra Classic 13 Equity Indexed Annuity

Overall, National Western Life Ultra Classic 13 Equity Indexed Annuity has a long surrender charge relative to the potential for interest gains.  The longer you’re locking into an annuity the more potential for growth there should be. It’s similar to the concept of risk versus reward. The more risk, the more reward there is. The longer the time of your commitment, the higher the upside should be for you with annuities. National Western Life Ultra Classic 13 Equity Indexed Annuity does not have a favorable risk relative to reward in my opinion. There are plenty of 10 year annuities that have more interest potential. What this tells me is there’s no good reason to lock yourself in for 13 years.

To Conclude

Locking yourself in a low interest annuity for 13 years may be good for your agent but not for you! The fact that National Western Life doesn’t show projected returns concerns me. Makes me think they have something to hide. This could allow agents to misrepresent the potential returns that are likely. 

Do you have any questions?  Comments?  Does everything match up to what you’ve been told?  If you need any clarification or what we’ve just explained, just reach out to us and ask.

Click here to receive an AnnuityEdu Retirement Income Analysis. (done by Annuityedu’s CFP Professional). This will help you decide whether an annuity is right for you. And which annuity types are best for your needs. Also, it will provide the true rate of return of the Annuity in your specific circumstance. So you understand your retirement strengths, weaknesses, and opportunities.

Have Questions on National Western Life Ultra Classic 13 Equity Indexed Annuity? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Annuity Help contact form].

Finally, purchasing an annuity is often an irreversible decision. You’ll have high surrender fee’s if you change your mind after you buy it.

We hope you found it helpful as you’re conducting your own research on National Western Life Ultra Classic 13 Equity Indexed Annuity. We hope you enjoy a plentiful retirement journey.

For any questions or if you need clarity about the National Western Life Ultra Classic 13 Equity Indexed Annuity, reach out to us by email or by phone. contact form.

 

All the best,

 

Annuityedu.com

National Western Life Ultra Classic 13 Equity Indexed Annuity

 

 

 

 

 

 

 


Midland National Endeavor 12 Annuity Review

Midland National Endeavor 12 Annuity Review

This review is meant to show you the strengths and weaknesses of the Midland National Endeavor 12 Annuity. As with all annuities, they work very well doing some aspects and poorly at other aspects. I’ll walk through the details of how this annuity works, so you can know what to expect.

  • Product Type
  • Fees
  • Investment options that are available and their realistic long term investment return expectations
  • Understanding the income rider
  • How it can best help you as part of your financial plan
  • How it’s most poorly used as part of your financial plan

Midland National Endeavor 12 Annuity Quick Facts

Product NameEndeavor 12 Fixed Index Annuity
IssuerMidland National Life
Type of ProductFixed Annuity
Standard & Poor’s Rating“A+” (Strong)
Phone Number1-877-586-0244
Websitehttps://www.midlandnational.com/why-annuities

Did your agent say you’ll get 6% Guaranteed Growth no matter what the market does?

If so keep reading this review. 

Some of it is, but we must understand the details of how it works, things aren’t always what they seem.

First of all, we’ll understand the base annuity and the investment options that are available. This will help us put the pitch of market similar growth with zero downside to the test. Then, we’ll walk through the income rider and guaranteed 6% increase in the income base. So we see exactly how it works and you can compare with what you’ve been told.

Midland National Endeavor  12 is a long term commitment with high penalties if you take your money out early.

There are a few ways that Agents might pitch this product.

  • To get guaranteed Lifetime income
  • Get uncapped market growth with zero downside
  • To create an inflation adjusted lifetime income
  • To receive a 6% guaranteed Growth

Is any of this true?

In a broad sense it is, there are important details you should be aware of. In this review we will help you understand the numbers you need to consider.

Retirees have been forced into risky investments due to low interest rates. These annuity guarantees however come at a cost. Often these costs are worth it but in others they’re not. It can depend on your risk tolerance, financial objectives, and time frame. This review is designed to help give you more information so you can decide whether it’s worth it for you.

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time, we’re dedicated to helping you with a second opinion viewpoint. So to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy.

Before we go into detail, here is an important legal disclosure.

This review of Midland National Endeavor 12 Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Midland National has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances.  This is not meant to be specific advice and your advisor may know more about your circumstances to make an appropriate recommendation.  All names, marks, and materials used for this review are property of their respective owners.

Information on Midland National

Today, Midland National is one of the leading insurance companies in the U.S. The company grew steadily during the early years, even as it faced the economic challenges of World War I, the Great Depression and World War II. In 1925, the company assumed its current name – Midland National® Life Insurance Company. With its continued emphasis on providing quality products and excellent service, the Company looks forward to celebrating many more milestones in the years to come.

 Midland National Endeavor 12 Annuity

 

 

Does the Midland National Endeavor 12 Annuity really earn 6% Guaranteed Growth with the Income Rider?

The Income Base of the Midland National Endeavor 12 Annuity guarantees to increase by 6% every year you delay taking income.

Wait…did you say 6% guaranteed!? Sign me up. Hold on! it’s not really earning 6% guaranteed!

While this guaranteed amount of increase can seem tempting, understand how it fits into your financial plan and what is the return it truly adds.

What I mean is, even though it increases 6% every year, it’s only after you lose 100% of annual income first. Every year, we all get 1 year closer to passing away, so the insurance companies are using mortality tables to determine that their promise to pay us is getting less every year, so they’ll guarantee 6% more for every year we don’t take income.

Before you make a long-term decision, understand 6% guaranteed increase is in income base. Which is money you can’t just walk away with. Nor money your beneficiaries get, or go make another investment with, or spend at once, and not even in a few years. You must take income with the specified withdrawal rate in the contract. What is the real return that 6% gives you? I’ll break down the significant aspects you need to know.

Let’s break down an example so you can understand how the income rider works.

Let’s Assume you’re age 65 years old and you’re going to invest $250,000. You plan to defer the Midland National Endeavor 12 annuity for 5 years while it increases 6% each year with the Guaranteed Income Rider. On the beginning of the 6th year you begin to pull lifetime income. At that point your Guaranteed minimum income value is $354,630 and you’re lifetime payment percentage of 5.8% for life. This equates to $20,569 annually. Therefore, by the time you’re 85 you’ve pulled $308,535 in income. At this point you’re above the average life expectancy. You’ve withdrawn $58,000 above your initial investment of $250,000 which is a total return of 20% in 20 years. Under 1% compounded annually!  This shows that you really didn’t earn 6% in those years.

Understanding the Surrender Charge

Contract Year123456789101112
Withdrawal Charge10%10%10%10%10%9%8%7%6%5%4%2%

Does this match up to what you’ve been told?

It’s important to compare the opportunity cost of utilizing other assets to satisfy income needs in the years you are deferring. You or your adviser may be selling the wrong assets first in retirement based on the wrong return assumptions. For example, if you truly believe that this Midland National Endeavor 12 annuity is earning 6%, you may defer it for a long time and sell assets that are truly earnings 3-5% real rate of return. This can damage your ability to maintain your lifestyle in retirement and may be forced to downsize. Has your adviser understood the internal rate of return these annuity guarantees provide? It’s typically less then 6%. Ask and double check before investing. It’s something we do free at AnnuityEdu. If you’d like us to calculate the true rate of return, just reach out and ask.

Now that we’ve learned how the income rider works for Midland National Endeavor 12.

What type of Performance can I expect from the options?

Note that rates may change. Rates discussed here may be higher or lower then the rates discussed below due to the potential of changing participation rates. If you’re being told about uncapped market upside with zero downside.  You’re being recommended the uncapped Risk Control index 5%. However, note even though the name of this index has the S&P 500 index in it, it’s not the same as being in the S&P 500. It has less upside because of it’s volatility controlled index.

Historical S&P 500 5% Risk Control Returns

In the most recent 10 years, this index with a spread of 1.5% and income rider costs of 1.05% has done 3.59% annually.

Highest 10 year period averaged 5.83%.

Midland National Endeavor 12 Annuity

 

 

 

 

 

Where it works best:

  • Producing a pension like lifetime guaranteed income stream
  •  Looking for conservative growth and want to have a guarantee on their principal over a 10 year investment.
  • To guarantee a lifetime income stream in the future

Where it works Worst:

  • Those looking for moderate to high Capital appreciation
  • For those who need liquidity.
  • If you’re looking to outperform inflation by a large degree to maintain your retirement lifestyle

Annuity Edu’s Summary on the Midland National Endeavor  12 Annuity

Overall this annuity is alright but doesn’t seem to jump out at me as anything special. The Income rider of the Midland National Life and the index options aren’t anything to brag about.  It’s definitely likely to be much better than a cash investment but there are better annuities out there.

Buying an Equity Indexed annuity is a long-term commitment and it’s important to test this annuity versus various others to see which one fits your goals and objectives the most.  Typically these annuities earn nowhere near the return of the guaranteed 6% rollup income rider  that agents’ brag about.

To Conclude

If your financial plan says you need 6% annually in retirement don’t think you can buy this annuity and earn 6% guaranteed and that all the investing and retirement planning you need to do is done. You’ll need a comprehensive retirement income analysis that factors inflation, taxes, and your investment positioning to see if the annuity adds value to your retirement. You need a Retirement Income Analysis done before buying.  It’s something we do for free here at Annuityedu.com.

Click here to receive an AnnuityEdu Retirement Income Analysis. (Done by Annuityedu’s CFP Professional) This will show the true rate of return of the annuity in your specific circumstance, and help you understand your retirement strengths, weaknesses, and opportunities.

Need help?

This will help you decide whether an annuity is right for you and which annuity types are best for your needs.  If you’re within 1-10 years of Retirement this type of Analysis is important and a must for anyone who is serious about retirement. Don’t have an insurance agent plan your retirement and if you did at least get a 2nd opinion.

Have Questions on Index Builder 14 Annuity? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Midland National Endeavor 12 AnnuityAnnuity Help contact form].

 

Finally, purchasing an annuity is often an irreversible decision. You’ll have high surrender fee’s if you change your mind after you buy it.

We hope you found it helpful as you’re conducting your own research on Midland National Endeavor 12 annuity. We wish you all the best in your retirement journey!

For any questions or if you need clarity about the Midland National Endeavor 12 annuity, reach out to us by our contact form.

All the best,

 

Annuityedu.com

Midland National Endeavor 12 Annuity

 

 

 

 

 


Jackson National Perspective II with Lifeguard Freedom Rider 7 Review

Jackson National Perspective II with Lifeguard Freedom Rider 7 Review

This review is meant to show you the strengths and weaknesses of the Jackson National Perspective II with lifeguard freedom rider 7 review. As with all annuities, they work very well doing some aspects and poorly at other aspects. I’ll walk through the details of how this annuity works, so you can know what to expect.

  • Product Type
  • Fees
  • Investment options that are available and their realistic long term investment return expectations
  • Understanding the income rider
  • How it can best help you as part of your financial plan
  • How it’s poorly used as part of your financial plan

Jackson National Perspective II with lifeguard freedom rider 7 Variable Annuity Quick Facts

Product NamePerspective II Variable Annuity
IssuerJackson National Life
Type of ProductVariable Annuity
Standard & Poor’s Rating“AA” (Very Strong)
Phone Number1-877-565-2968
Websitehttps://www.jackson.com/products/variable-annuities/perspective-ii/introduction.xhtml

Did your Agent say that you’ll earn 7% Guaranteed no matter what the market does?!

If so, you have to read this review…

The Perspective II Annuity will guarantee you lifetime income. On the other hand, there’s a withdrawal rate and guaranteed lifetime rate that people are getting confused with. The 7% Rollup Rate is not money you can just walk away. Advisors and agents often use the 7% Rollup as a sales tactic but the real rate of return isn’t figured or disclosed by agents and advisors. However, 7% Guaranteed or the market can sound pretty tempting but don’t bite until you know real numbers. In the Annuity Review, we’ll break down the important numbers you need to know before making this decision. 

There are a few ways that Agents might pitch this product

  • Guaranteed lifetime income
  • To get 7% growth and pursue market upside
  • Be able to withdraw 5% for the rest of your life no matter what the market does
  • Able to be in the stock market while at the same time have guaranteed lifetime income.

Is any of this true?

In a broad sense it is, there are important details you should be aware of. In this review we will help you understand the numbers you need to consider.

You can learn more by downloading the prospectus by clicking here Prospectus download

Many retirees have been forced into risky investments due to low interest rates. Variable Annuities with guaranteed income riders such as the Jackson National Perspective II with lifeguard freedom rider 7 Annuity have been very popular in recent years. These Annuity guarantees however come at a cost. Often these costs are worth it but in others they’re not. It can depend on your risk tolerance, financial objectives, and time frame. This review is designed to help give you more information so you can decide whether it’s worth it for you.

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time. We’re dedicated to helping you with a second opinion viewpoint so to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy. 

Before we go into detail, here is an important disclosure

Jackson National Perspective II with lifeguard freedom rider 7 Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Jackson National has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances.  This is not specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation.  All names, marks, and materials used for this review are property of their respective owners.

Information on Jackson National

Jackson National Life Insurance Company® (Jackson®) first opened for business in 1961 as a small family-owned company. They have evolved over the years into a successful multi-billion-dollar organization, have lived by the mantra that no matter where the journey takes them, they will never forget where they came from.  By combining the responsiveness and personal attention of a family business with the resources and strength of a large corporation, they are able to provide a unique experience to customers and partners.

 Jackson National Perspective II with lifeguard freedom rider 7

 

 

 

 

If I’m not earnings 7% guaranteed what is the rate of return that the Income rider guarantees’ me?

In this section were going to break down how much value that Income Rider adds and what rate of return the income rider 7% Guarantee truly provides.  You’ll be disappointed if you’re expecting the income rider to provide the 6 or 7% growth to maintain your lifestyle. Remember the 7% growth depends on your specific model and year you bought. It’s not money you can walk away with. But its guaranteed increase in your income value.  Let’s break down the numbers.  

Scenario 1

For example, You’re age 65, put this annuity in, and you plan to defer for 5 years until age 70 and then begin taking withdrawals or “income”. Remember the withdrawals are reductions of principal and any gains for the year if any. This is not interest. There’s a difference.  You put $1,000,000 in this annuity. After deferring it for 5 years your income base value has increased to $1,350,000 million and now want to begin taking income. At age 70 in this example the person is guaranteed 4.75% withdrawal for the rest of their life which is $64,125. After withdrawing $64,125 for 20 years. They’re now age 90.  They’ve received total payments of $1,282,500. ($64,125 X 20 years).  This means they’ve earned 28% from their income rider in 25 years.  They put in 1 million and received a $1,282,500.

This is less than 1% annually! 

Often, they’ll illustrate performance from 1987 which is biased. The late 80’s and 90’s had some of the best performance in stock market history. If this performance isn’t repeated the illustrations would be completely different.  This shows how you really didn’t earn 7% in those years. It was a trick the insurance company played on you. Run a financial plan so you can see through the smoke and mirrors. This is something we can help you do for free here at annuityedu.com, just reach out to us and ask. Our mission is to help retirees educate themselves so they can make the best decisions for their retirement and not the insurance companies! This annuity may still have a role, it depends on your overall circumstance, risk tolerance, and rate of return you need in retirement.     

Understanding the Surrender Charge

Contract Year1234567Thereafter
Withdrawal Charge8.5%7.5%6.5%5.5%5%4%2%0%

Investment options

The Jackson Perspective II

The freedom to choose. Jackson has over 90 investment options to choose from and does not limit you. This is definitely a strong point on this variable annuity. This is good for investors. The potential problem to consider is investing too conservatively inside this model.  Especially when choosing the income rider. The higher fees and lower returns more conservative allocations can make, it’s likely that the returns you experience will not keep up with inflation.

An Important aspect about this Jackson Perspective II Annuity for fixed Income Allocation.

What are some of the benefits of the Jackson National Perspective II with lifeguard freedom rider 7 Annuity?

The benefits of the base annuity mortality and expense charge also known as M&E of 1.15% and administration charge 0.15%. The total cost of this annuity is 1.30% annually. The Lifeguard Freedom Flex that adds the 7% rollup add an additional 1.5%.  That brings the expenses up to 2.8% annually. We haven’t discussed the fee’s inside the funds. The funds have expenses ranging from 0.55% to a maximum of 2.18%. If we assume an average expense of 1.20%, that brings the total expenses for the annuity to 4% annually! It’s for this reason to make sure that this annuity is appropriate for you. It can be hard for an account to perform with a 4% drag.  Also note that Jackson National has the option to increase the fee on the rider upto 3% annually from 1.5%.  At the higher rider expense, total expenses would be approximately 5.5% annually.

Are you considering a Conservative, Moderate or Balanced allocation within the Annuity with the Lifeguard Freedom Flex 7?

If so this is a must-read section.

Due to the high fee’s it’ll be difficult to make money in the conservative allocation especially with the rider. If growing your capital base is important to you while taking income then continue reading. Interest rates are low if your fixed income portfolio is earning 2% but paying over 3% in fee’s. You’ll be losing 1% in that portfolio of your retirement. Investors might do this to reduce volatility but you  want to ask yourself if you’d prefer to lose 1% on that portion, maintain a long-term view, and knowing that the guarantees of the annuity are there in the worst-case scenario.

The fixed income portion losses will affect the total performance in a negative way.

Current aggregate bond index is earning around 2-2.5%.  We’re not sure how long rates will stay this low so it’s something to consider especially if you want to grow your principal. For this reason this annuity will perform best when weighted more aggressively in equities. While having more money in equities can create more volatility. The income rider guarantee is most valuable when invested aggressively.

The Jackson Lifeguard Freedom Flex 7 isn’t as valuable when invested more conservatively. 

If we’re going to have a feature that’s costing you money but it guarantees you lifetime income your minus will grow. If the stock market were to experience a great depression loss of 90% and didn’t recover for a long period of time, that Income Rider would help dramatically. So it’s up to your investment to make up for the fees and go for the upside while you can. The income riders’ value comes in its ability to allow you to withdraw 5% as long as you live. Remember you can pull 5% out of a cash investment earnings 0% for 20 years before withdrawing all your principal.

Jackson National Perspective II with lifeguard freedom rider 7

 

 

 

 

 

 

Where it works Best:

  • Producing a pension like lifetime guaranteed income stream. 
  • Those looking for moderate capital appreciation but in which guaranteed lifetime income is important. 
  • Conservative investors who need guarantees to dip into stock market based investments

Where it works Worst:

  • Those looking to have high levels of capital appreciation
  • Who want maximum capital appreciation
  • For those who want minimal volatility and may choose conservative investment options

AnnuityEdu’s Summary on the Jackson National Perspective II with lifeguard freedom rider 7 Annuity

Overall, Jackson National Perspective II with lifeguard freedom rider 7 has some good features and some important aspects that you need to understand before buying. The largest problem I have is that retirees are likely buying this annuity thinking they are earning the 7% Guaranteed and they’re not. These annuities will typically earn much less than the 7% return.  The fees can be a large drag on performance. So, consider that when reviewing your retirement income strategy. Understand the rate of return you need in retirement. Then you can see about positioning investments to reach the rate of return you need to live the lifestyle of your dreams!

To Conclude

 If your financial plan says you need 7% annually in retirement don’t think you can buy Jackson National Perspective II with lifeguard freedom rider 7 and earn 7% guaranteed and all the investing and Retirement planning you need to do is done. You’ll need a comprehensive retirement income analysis that factors inflation, taxes, and your investment positioning to see if the annuity adds value to your retirement. Get a Retirement Income Analysis.  It’s something we do for free here at Annuityedu.com.

Click here to receive an AnnuityEdu Retirement Income Analysis. (Done by Annuityedu’s CFP Professional)

This will show the true rate of return of the annuity in your specific circumstance, and help you understand your retirement strengths, weaknesses, and opportunities. And also, help you decide whether an annuity is right for you and which annuity types are best for your needs.  If you’re within 1-10 years of Retirement this type of Analysis is important and a must for anyone who is serious about retirement. Don’t have an insurance agent plan your retirement and if you did at least get a 2nd opinion.

Have Questions on Jackson National Perspective II with lifeguard freedom rider 7 Annuity? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Annuity Help contact form].Jackson National Perspective II with lifeguard freedom rider 7

 

We hope you found it helpful as you’re conducting your own research on Jackson National Perspective II with lifeguard freedom rider 7. We hope you enjoy a plentiful retirement.

 

For any questions or if you need clarity about the Jackson National Perspective II with lifeguard freedom rider 7 Annuity, reach out to us by email or by phone.

 

 

All the best,

 

AnnuityEdu.com


Jackson National Perspective II with lifeguard freedom rider 7

 

Fidelity & Guaranty Life Prosperity Elite 10 Annuity Review

Fidelity & Guaranty Life Prosperity Elite Series:

Protection Package Prosperity Elite 10 Review

This review is meant to show you the strengths and weaknesses of the Fidelity & Guaranty Life Prosperity Elite Series: Protection Package Prosperity Elite 10. I’ll also go into the details you need to know in regards to the Income rider and how to find out if it’s worth it for you. As with all annuities, they work very well doing some aspects and poorly at others. I’ll walk through the details of how Fidelity & Guaranty Life Prosperity Elite Series works, so you can know what to expect.

In this review we’ll cover

  • Product Type Fees
  • Current Rates 
  • Investment options that are available and their realistic long term investment return expectations
  • Understanding the 18% Bonus
  • Understanding the guaranteed 6% income rider and its true value
  • How the death benefit works
  • Help you as part of your financial plan
  • How it is most poorly used as part of your financial plan

You can learn more about this from www.home.fglife.com 

Fidelity & Guaranty Life Prosperity Elite Series Fixed Indexed Annuity Quick Facts

Product NameProsperity Elite 10 Protection
IssuerFidelity & Guaranty Life Insurance Company
Type of ProductFixed Indexed Annuity
Standard & Poor’s Rating“BBB” (Good)
Phone Number1-888-513-8797
Websitewww.home.fglife.com

How do Agents Typically Pitch This Product? 

  • As a way to get a high level of Guaranteed Lifetime Income
  • To get 6% Guaranteed growth every year you don’t take income
  • Guaranteed growth with market upside potential
  • To receive a 7% upfront bonus!
  • To get market upside with potential to lock in gains
  • Principal protection over a 10-year period while going for growth
  • To get tax deferred accumulation 

Is any of this True?

Things aren’t’ always what they seem on surface! 

Dig into the details because much of the guaranteed growth part is false and very misleading. The truth is that actual returns are very low with this annuity.  It’s strongest in Death benefit and Income but the income is still much lower than the 6% guaranteed number. A good part about of this annuity is that if you pass away then the you can get the income base as a death benefit. While death benefit may fit your goals it’s also important to consider the benefits to you if you live an average or longer life.

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time. We’re dedicated to helping you with a second opinion viewpoint  to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy.

Before we go in the details, please read this legal disclosure.

This review is meant to be an independent review at the request of readers, so they could see my perspective as a when breaking down the positives and negatives of this model annuity.  This is an independent product review, not a recommendation to buy or sell an annuity. Fidelity & Guaranty Life has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment, product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions as they relate to your individual circumstances. This is not meant to be specific advice and your advisor may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.

Information about Fidelity & Guaranty Life 

Fidelity & Guaranty Life strives to create a culture that rewards workplace engagement, teamwork and results. They focus their efforts on activities that benefit the long-term interests of policyholders, shareholders, and the community. Fidelity & Guaranty Life along with its employees is 100% dedicated to giving back to the community through charitable donations and volunteer work. 

In addition to financial support for the community, employees enjoy giving their time toward worthy causes in the cities where they work. The Baltimore community has participated in the annual “Rebuilding Together” project for many years now wherein employees and their families volunteer time and materials to refurbish Baltimore-area homes for needy families in the community. In Iowa, FGL employees have participated in volunteer events such as packing meals for Meals from the Heartland. These meals are shipped all over the world and are a key factor in fighting starvation and hunger.

A question to ask yourself is

“Will this annuity combined with your other assets provide the returns you need to maintain your lifestyle?” This is what Retirement planning annuity analysis is all about. 

 If you have an agent who’s telling you that this annuity is earning 6% guaranteed you need to understand the truth. 

My goal is to help you understand more about the details and exactly what you can expect, so you can see deeper into an overly simplified sales pitch.

The questions a retiree should be asking themselves are:

How does this 6% Guaranteed Growth for Prosperity Elite fixed indexed annuity benefit my financial Plan? 

What’s the real rate of return that it adds to my family? 

The Income rider for the Fidelity & Guaranty life Prosperity Elite 10 has a cost of 0.95%. Annually this is currently around 30% of cap rates. In other words, the fee is 30% of upside you’ll get so this is something important we’ll consider whether the fee is worth the benefit.

The Income rider offers a 6% compounded return to guaranteed withdrawal value, 6% Guaranteed Growth!? Not so fast. This is not money you can just walk away with but you must withdrawal according the annuities rules.   

If the F&G Guaranteed Income rider really isn’t earning 6% what return is it earning?

Let’s breakdown the numbers you need to know. 

We’ll start looking at the guaranteed income portion then we’ll look at the accumulation value investment options. We’ll use an example of a 66-year-old male utilizing a joint income rider benefit for his 59-year-old wife.  He’s been told by his agent that he’s going to get an 18% bonus and 6% guaranteed growth of his income base for the first 10 years before he takes income. His goal is take lifetime guaranteed in year 10. 

He makes a premium payment of $263,000 in year one.  Immediately his GMWB income base value increases 18% to $310,340 by the time year 10 when he wants to begin withdrawing his income base is up $444,013.  This allows him to begin withdrawing $20,439 for him and his wife guaranteed for the rest of your life.

What does all this mean to you?

After 10 years of deferring the F&G Elite Pro Annuity and after 10 years of withdrawing 20,439 of lifetime annual income, we’ve now owned this annuity for 20 years and have received a total of $200,000 in lifetime payments. This means that you haven’t made a positive return after 20 years but you have paid around 19% in fees.  At this point you’re 86 years old and past the average life expectancy. I figured the 19% in fees by calculating the 0.95% fee multiplied by 20 years. 

Understand what the insurance companies are doing when they offer you to delay your payments for your future 6% increases in income base value. They’re looking at actuarial life expectancy  and they know that their promise to pay you is getting less from a mortality standpoint. It’s not always best to defer this annuity and this F&G annuity is earning nowhere near the 6% guaranteed growth.  If we haven’t made any money in the 1st 20 years when do we make money and do we ever earn 6% is a common question we often get here at AnnuityEdu.com

After withdrawing guaranteed lifetime for 30 years you’ve received 408,000 with a deposit of 260,000.  At this point you’re 96 years old have earned a total return of 55%.  This is an average annual return of under 2% compounded per year!  Nowhere near the 6% guaranteed that they make it seem.  So, if you have an agent that’s telling otherwise you may need a new advisor.  If you understand the numbers and can afford this low a return in retirement then this annuity may be good for you.

 

Fidelity & Guaranty Life Prosperity Elite Series

 

 

What about the the Fidelity & Guaranty Life Prosperity Elite Series index option performance?

Fidelity & Guaranty Life Prosperity Elite Series has very weak performance according to the current cap rates you should not expect to earn more than 3% annually and likely less.

F&G Elite Index Option with Caps

S&P 1 Year, monthly average with cap   Current cap      3.25%

S&P 1 year annual point to point with cap  current cap 3.00%

Gold Annual Point to Point    3.25%

S&P 1 year monthly point to point with  cap Current cap 1.50%

S&P 1 year fixed declared rate on index gain  2.50%

The annual point to point with a cap is the most common and easiest to understand method.  The highest this strategy would’ve returned over the last 20 years would’ve been 1.19% annually. That was 2005-2015.  If you’re expecting and needing higher returns in retirement then you  may want to reconsider utilizing this annuity.

Fidelity & Guaranty Life Prosperity Elite Series

 

 

 

 

 

 

Where it works best:

  • Producing a pension like lifetime Guaranteed Income Stream with the Income Rider
  • Those looking to earn less then 2% on their capital
  • Who want to make sure they never lose their principal and will to accept safety over return

Where it works worst:

  • Looking for moderate to maximum growth
  • Who need a return on their investment in the first decade of retirement if using income rider
  • Those who need a return of over 2% annually in retirement to maintain their lifestyle

To Conclude

Overall, Fidelity & Guaranty Life Prosperity Elite Series has more bad features then good ones in my Opinion.  The cap are and index return are extremely low.  The attempts to make up for it with 18% bonus but the returns are to slow still for most investor’s needs. 

The Fidelity & Guaranty Life Prosperity Elite Series annuity comes in 3 different surrender charges 7, 10 and 14 year. This review was on the 10 year but they’re all pretty similar. 

What concerns me is the low internal rate of return and I feel many agents and retiree’s may think that they’re really earning a 6% return when they’re not.  If you think you’re earning 6% but you’re really not this can having horrific consequences to the your retirement success and may cause a premature depletion of your capital and purchasing power. 

In order to avoid this it’s important to test this annuity versus various others to see which one fits your goals and objectives the most.  This is something we do for free here at annuityedu.com.  The only way to know if this annuity is a good fit for you is to have it tested.

We’ll use our proprietary calculator to illustrate for you how this annuity will likely perform in your specific situation.   

Click here to Test my Annuity, If your agent was honest with you, the numbers will match up – if not, well at least you know all of the important information before you buy.

 

Have Questions on the Fidelity & Guaranty Life Prosperity Elite Series? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Annuity Help contact form].

Purchasing an annuity is often an irreversible decision. Usually you’ll  have high surrender fee’s if you change your mind after you buy.

Fidelity & Guaranty Life Prosperity Elite Series

 

We hope you found it helpful as you’re conducting your own research on Fidelity & Guaranty Annuity.  Thank you for visiting our site.

If you still have questions about this annuity, or you’re an investor that’s still confused about the Fidelity & Guaranty Annuity. You can reach out to us by email.  

We can’t  always respond right away, but we strive to respond within 24 hours.

 

All the best,

 

AnnuityEdu.com

Fidelity & Guaranty Life Prosperity Elite Series

 

 

 

 

 

 

 


 

AIG Polaris Platinum III Annuity Review

AIG Polaris Platinum III Annuity Review

Today’s review is on the AIG Polaris Platinum III Annuity. The AIG Polaris is described as the “total retirement package by AIG. We’ll review this AIG Polaris Platinum III Annuity so you can see and understand all the details. This is a variable annuity so it’s important to understand the fee and benefit information to make sure it’s the best retirement strategy for you and not your advisor.

  • Product Type
  • Fees
  • Investment options that are available and their realistic long term investment return expectations
  • Understanding the income rider
  • How it can best help you as part of your financial plan
  • How it’s most poorly used as part of your financial plan

AIG Polaris Platinum III Annuity Quick Facts

Product NamePolaris Platinum III Variable Annuity
IssuerAmerican International Group
Type of ProductVariable Annuity
Standard & Poor’s Rating“A+” (Excellent)
Phone Number1-800-888-2452
Websitewww.aig.com/individual/insurance/life

There are a few ways that Agents might pitch this product

  • Guaranteed lifetime income
  • To get 6% growth and pursue market upside
  • Be able to withdraw 7% for the rest of your life no matter what the market does
  • To be able to be in the stock market while at the same time have guaranteed lifetime income.

How Much of This is True?

The are some parts that are true but other it’s important to know the details.

The AIG Polaris Platinum III Annuity will guarantee your life time income however there’s a withdrawal rates and guaranteed lifetime rate that I see people getting confused with.  The withdrawal rates are not the same as the lifetime income. You can utilize the withdrawal rate but if the you deplete the account then they’ll guarantee you the lifetime amount.

You can learn more by downloading the prospectus by clicking here Prospectus download

Many retirees have been forced into risky investments due to low interest rates. Variable Annuities with guaranteed income riders such as the AIG Polaris Platinum III Annuity have been very popular in recent years. These Annuity guarantees however come at a cost. Often these costs are worth it but in others they’re not. It can depend on your risk tolerance, financial objectives, and time frame. 

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time. We’re dedicated to helping you with a second opinion viewpoint so to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy. 

Before we go into detail, here is an important disclosure

This review of Polaris Platinum III Variable Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. AIG Polaris Platinum has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances.  This is not meant to be specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.

Information on AIG

Founded in 1919, American International Group, Inc. (AIG) is a leading global insurance organization serving commercial, institutional, and individual customers in more than 100 countries and jurisdictions.

They work to pinpoint risks and prevent them from becoming losses so clients are free to create the future; they help clients identify unseen risks—and stop accidents before they happen.

For nearly one hundred years, the organization has faced and managed complex risks; and provided the risk expertise and financial strength that empowers 90 million clients in more than 100 countries. Today, they’re evolving to better meet client needs. According to AIG “They’re simplifying their structure so that they work more closely with clients, provide greater transparency, and deliver value faster and more efficiently.

As with most Variable Annuities the AIG Polaris fees are an important area to analyze.

The fees on this annuity are its primary drawback and you should analyze the fees to see if the benefits that the fee’s provide are worth it.

The AIG Polaris base control fee is 1.30% for joint life benefit. Then you pay 1.30% for the fee’s inside the funds. This is with no riders. Often times advisors will recommend this annuity for tax deferral with no rider but then it’s important to see if the fee’s you pay might be more than the taxes. With the Polaris income-less daily rider that will run you an additional 1.10% for single and 1.35%  bring the total annual fee’s to 3.9%. This over a 10-year period is 39%. This can really add up over your retirement period and will be a drag on performance.  It can be a lot especially if you have too much of your nest egg tied up it’ll be like running with huge weight tied to you. 

 

 AIG Polaris Platinum III Annuity

 

Let’s see if it the benefits that it might provide are worth the higher fees.

Contract Year1234567Thereafter
Withdrawal Charge8%7%6%5%4%3%2%0%

Are you considering a conservative or Moderate allocation within the Annuity?

An Important aspect about this AIG Polaris Platinum III Annuity for fixed Income Allocation’s.

Conservative or moderate allocations have a high percentage in bonds. With rates so low the fixed income portion of the portfolio will be losing money. For example, the aggregate bond index is currently yielding 2%. If the fees are 3.6% then you’ll be using the interest to pay the annuities fees. In other words, AIG and your advisor will be making more money on the bonds then you will! Yes high yield bonds can earn more than 3.9% but odds are high yield bonds won’t make up that large of a percentage of your portfolio. For this reason, it makes more sense to have a higher equity allocation.

If you’re extremely conservative and even with the annuities guarantees you want to be in bonds, then the rider fee’s will eat away on your interest and you may want to consider taking a long term view and accepting more volatility in order to get your money’s worth! This annuity does have a good option to maintain the equity exposure while having the living benefits which is a big plus.

What are some of the benefits of the AIG Polaris Annuity?

The benefits of the base annuity mortality and expense charge also known as M&E of 1.30% allow you to switch around with multiple money managers at no cost. The base also gives you the tax deferral of an annuity. The annuity has b shares which add another 1.3% in fees. The AIG Polaris annuity already has 2.6% in annual fee’s without the rider. The lifetime income rider adds an additional 1.10% for the single life option and 1.35% for the joint income life option. These can change up to a maximum 2.20% for single life and 2.70% for joint life. The base annuity is expensive and if you’re looking for growth the fees will weigh you down. Let’s look at the annuity’s income rider which is where things get more confusing and it’s important to understand the numbers so you can make this decision.

There are 3 Income riders available

Polaris Income Plus®

Offers guaranteed lifetime income plus the opportunity to increase income by locking in the greater of either the contract’s Highest Anniversary Value, or an annual Income Credit. If you elect Polaris Income Plus, you may choose from Income Options 1, 2 or 3. The annual 6% Income Credit is an amount we may add to the Income Base each year for the first 12 Benefit Years. The 6% Income Credit is reduced but not eliminated in any benefit year in which cumulative withdrawals are less than 6% of the Income Base and not greater than the Maximum Annual Withdrawal Amount applicable to the income option you elected, thereby providing a guarantee that income can increase during the first 12 years even after starting withdrawals.

After the first 12 years, only the Highest Anniversary Value increase may be available. In addition, if you do not take any withdrawals during the first 12 years, you’ll be eligible for the Minimum Income Base on the 12th Benefit Year Anniversary. The Minimum Income Basis equal to 200% of the first Benefit Year’s Purchase Payments.

If you’re expecting to be able to walk away with the 6% then you’ll be disappointed.

The income base is for determining your income value and not you’re cash value. Their using life expectancy tables to know that their promise to pay you is getting less in terms of years so every year you don’t take income AIG is willing to give you more.   This annuity will typically earn much less then 6%.  

Polaris Income Builder®

Offers guaranteed lifetime income and the opportunity to increase income by locking in the greater of either the contract’s Highest Anniversary Value, or an annual Income Credit. The annual 5% Income Credit is an amount we may add to the Income Base each year for the first 12 Benefit Years. The 5% Income Credit is only available in years when no withdrawals are taken. After the first 12 years, only the Highest Anniversary Value increase may be available. In addition, if you do not take any withdrawals during the first 12 years, you will be eligible for the Minimum Income Base on the 12th Benefit Year Anniversary. The Minimum Income Base is equal to 200% of the first Benefit Year’s Purchase Payments.

Polaris Income Plus DailySM

Offers guaranteed lifetime income plus the opportunity to increase income by locking in Step-up Values. Prior to the first withdrawal, Income Base step-ups, if any, occur on a daily basis. After the first withdrawal, Income Base step-ups, if any, occur only on Benefit Year Anniversaries, looking back at the prior Benefit Year’s Step-up Values. If you elect Polaris Income Plus Daily, you may choose from Income Options 1, 2, or 3.

For Polaris Income Plus and Polaris Income Builder only, an amount that may be added to the Income Base during the Income Credit Period as shown in the following table:

Income Credit Availability


Optional
 Living Benefit
Income Credit (as a percentage of the Income Credit Base)
Polaris Income Plus6%Available during the first 12 Benefit Years — the Income Credit is reduced in years withdrawals are taken
Polaris Income Builder5%Available during the first 12 Benefit Years — the Income Credit is eliminated in years any withdrawal is taken
Polaris Income Plus DailyNot availableNot available

AIG Polaris Platinum III Annuity

 

 

 

 

 

Where it works Best:

  • Producing a pension like lifetime guaranteed income stream. 
  • Those looking for moderate capital appreciation but in which guaranteed lifetime income is important. 
  • Conservative investors who need guarantees to dip into stock market based investments

Where it works Worst:

  • Those looking to receive 7% return for life
  • Those who need liquidity.
  • Who want maximum capital appreciation
  • For those who want minimal volatility and may choose conservative investment options

Annuity Edu’s Summary on the AIG Polaris Platinum III Annuity

Overall this annuity has some good features and others to just make sure your aware of going in. The Surrender charge period of 10 years is low relative to other in it’s class. I also like AIG allows up to 81% equity exposure on some of the options even with the guaranteed Riders. This is a big benefit and other companies don’t offer this. The part I don’t like is that insurance companies can increase the fees on the riders dramatically. Another part is to make sure you understand that the 6% guaranteed income isn’t money you can just walk away with. Their marketing material makes it seem you can withdraw up to 7% for life. It’s up to 7% annual withdrawals until it runs out of money and it drops dramatically.  

To Conclude

If your financial plan says you need 6% annually in retirement, don’t think you can buy the AIG Polaris get 6% guaranteed and all the investing and Retirement planning you need is done. You’ll need a comprehensive retirement income analysis that factors inflation, taxes, and your investment positioning to see if the annuity adds value to your retirement.

Get a Retirement Income Analysis done.  

We do this for free at Annuityedu.com. My concern is that agents use sales tactics to sell. They are likely overstating the internal rate of return this annuity will provide. Just because the income base increases by 6% in years you don’t take income doesn’t mean this annuity is earning 6%. If your advisor is saying it’s earning 6% Guaranteed, contact us and we’ll show you the numbers so you can go back to your advisor with an intelligent response.

Click here to Test my Annuity.

If your agent was honest with you, the numbers will match up – if not, well at least you know before you buy. 

Make sure this annuity fits into your financial plan. Often an annuity may be right for you. Make sure you understand the rate of return the income rider delivers and whether the high costs are worth it. 

Have Questions on AIG Polaris Platinum III Annuity? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Annuity Help contact form].

AIG Polaris Platinum III Annuity

 

Finally, purchasing an annuity is often an irreversible decision. You’ll have high surrender fee’s if you change your mind after you buy it. Surrender fees cause assets to not be utilized at their fullest potential.

We hope you found it helpful as you’re conducting your own research on AIG Polaris Platinum III Annuity. We hope you enjoy a plentiful retirement.

For any questions or if you need clarity about the AIG Polaris Platinum III Annuity, reach out to us by email or by phone.

 

 

All the best,

 

AnnuityEdu.com

AIG Polaris Platinum III Annuity

 

 

 

 

 

 

 


National Western Life Annuity Income Outlook Plus 5

NWL Impact 10 with 7% premium Bonus

National Western Life Annuity Income Outlook Plus 5 Review

This review is meant to show you the strengths and weaknesses of the National Western Life Annuity Income Outlook Plus 5. I’ll also go into the details you need to know in regards to the Income outlook plus 5 rider and how to find out if it’s worth it for you. As with all annuities, they work very well doing some aspects and poorly at other aspects. I’ll walk through the details of how National Western Life Annuity Income Outlook Plus 5 works, so you can know what to expect. This annuity is often positioned with an income Secure rider, so I’ll go into detail on how the income rider works.

  • Product type
  • Fees
  • Current rates
  • Investment options that are available and their Realistic long term investment return expectations
  • Understanding the 7% Bonus!
  • Understanding the Guaranteed 4% income Rider and its true value
  • How it can best help you as part of your financial plan

National Western Life Annuity Income Outlook Plus 5 Quick Facts

Product NameNWL Impact 10 Income Outlook Plus 5 Rider
IssuerNational Western Life Insurance Company
Type of ProductFixed Indexed Annuity
Standard & Poor’s Rating“A” (Strong)
Phone Number1-800-922-9422
Websitewww.nationalwesternlife.com

Is any of this True?

In a sense, it is, however, the details are important because things aren’t always what they seem. While many of the statements above are true, they don’t tell the whole story. My goal is to help you understand more about the details and exactly what you can expect, so you can see deeper into an overly simplified sales pitch.

The most often misunderstood and misstated by agents is the idea that you get a 4% guaranteed growth in the annuity in years you don’t take income. While it’s true the income base does increase by a guaranteed 4%, understand that this is not the equivalent of earning 4%. You can’t just walk away with the Income Rider’s 4% growth and spend the money. This 4% increases your income value which increases your income by 4% every year you don’t take income.

The insurance companies are smart and nobody is guaranteeing 4% right now with interest rates so low so let’s understand how the insurance companies think that way we can make the best decision for our retirement and not the insurance companies!

Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.

If it happens that you’re on this website for the first time. We’re dedicated to helping you with a second opinion viewpoint so to help you see through some of sales pitches that aren’t what they seem.   We hope with the information we provide you’ll be  better educated to make an informed decision before you buy.

Before we go into detail, here is an important legal disclosure.

This review of National Western Life is meant to be an independent review at the request of readers, in addition, so they could see my perspective when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. National Western has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances. This is not meant to be specific advice and your advisor may know more about your circumstances to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.

Information about National Western Life

National Western Life Insurance Company is chartered by the State of Colorado and a wholly owned subsidiary of National Western Life Group, Inc. National Western’s domestic operations extend to forty-nine states, the District of Columbia and four U.S. territories. The Company is also licensed in Haiti and accepts applications at its Home Office in Austin, Texas from – and issues policies to – non-U.S. residents. National Western operations extend globally to domestic and foreign markets.

NWL’s mission is to provide high quality insurance products on a global basis to meet the financial security needs of well-defined market segments. They provide professional and friendly service to policyholders and agents and are responsive to the needs of their employees, shareholders and the community.  The Company is publicly traded and trades on the NASDAQ ticker NWLI.

See more at www.NationalWesternLife.com

How do agent’s typically Pitch this Product?

  • As a way to get a high level of Guaranteed Lifetime Income
  • To get 4% growth every year you don’t take income
  • Guaranteed growth with market upside potential
  • To receive a 7% upfront Bonus!
  • To get market upside with potential to lock in gains
  • Principal protection over a 10 year period while going for growth
  • Getting tax deferred accumulation

Guaranteed Lifetime Income?

This National Western Life Annuity Income Outlook Plus 5 strength, as with most annuities, comes in guaranteeing lifetime income.  National western life insurance company is saying that for every year you get older and don’t take income they’ll give you 4% more. 

In other words every year you lose 100% in income and according to their life expectancy tables their promise to pay you income for your  lifetime is getting less due to you getting older their willing to give you 4% more. The question is how much is the 4% rider really worth and is worth it for you? Throughout the rest of the review, we’ll go through some factors you should consider when answering that question.

What is the National Western Life Annuity Income Outlook Plus 5 Surrender schedule?

Contract Year12345678910Thereafter
Withdrawal Charge10%10%10%10%10%9%8%6%4%2%0%

How much does the National Western Life NWL 10 Rider Cost? 

As you can see the National Western Life is a 10 year commitment. It’s important to understand all the details before you buy because it has a very unforgiving surrender schedule.

The annual cost of the rider is 1.50%. If your account value is 150,000 but your income value 250,000 the fee is 1.50% of your income benefit account which is around 2.5% of the account value.  It’s important to note that this will make it very difficult for the account value to grow especially while taking withdrawals.

 

National Western Life Income Outlook Plus 5 Annuity

 

 

 

As a principal protected way to get up capped market growth?

National Western Life Annuity Income Outlook Plus 5 can help you get growth with principal protection. It’s important to note, however, that it’s not the same as being in the market as far the upside. I’ll walk you through the expected return by looking at the rates. This annuity has some of the most complex and confusing crediting methods that I’ve seen on an annuity. To make things worse the company doesn’t show any historical performance of the crediting methods making it very difficult to see what we can expect.

There are 4 different Index crediting options.

With this National Western Life Annuity Income Outlook Plus 5 the first year participation rates will higher then ongoing participation rates. For example current 1st year participation rates are 75% for option A and 55% for option K.

Option A –

Indexed Interest rate Annual Rachet with Monthly average-  Any Indexed Interest Earned is calculated from the beginning index Value for each policy year whether higher or lower than the previous year.  All indexed Interest is credited annually on the Policy Anniversary and locked-in.  Future decrease in the Index alone with reduce your financial low.

Option B –

Fixed Rate—This is similar to fixed annuity but it can float and adjust if rates go up or down. Check your current rate sheet for up to date information.

Option C –

Indexed Interest rate—Annual rachet with monthly cap

Option K –

Interest on the account value is linked in part to the S&P500- Composite stock index, the Nikkei 225, index and Eurostoxx index.
This can change subject to participation rates.

Understanding the Income Outlook plus 5 Rider and the 4% compounded growth rate 4% Guaranteed return, sign me up!  Not so fast.

It’s important to understand the rate of return this provides to your financial plan when analyzing whether the Income outlook rider is appropriate in helping you reach your financial goals.  To see through the smoke and mirrors, it’s important to test this annuity versus others for the internal rate of return that it provides to you.

The way National Western Life gives you 4% every year, you don’t take income is based on mortality tables. They know that every year you don’t take income is a year that their promise to pay your lifetime income is getting less, so they’re willing to give you 4% additional in years that you do take income because they know they’ll on average be required to give you income for less years.

The insurance companies are smart and they know their numbers, so it’s important to analyze all your options and know your numbers.  You can do this by testing the annuity for the internal rate of return, so you can make the smartest decision to see if the numbers will provide for you in your financial plan.

Scenario 1

Here’s and example to explain what I mean. Let’s assume you’re age 65 and you put $100,000 into this National Western Life Impact 10 Annuity with Income outlook plus 5. In the 1st year you’ll receive a 7% bonus and at the end of year 1 year 1 your benefit base will be $116,480 allowing you an annual income of $6,406.40 for life. This means by year 15 you’ve taken $96,096 in income. By the time you’re 80 you haven’t made a positive return on the income feature yet.   Age 80 is also above the life expectancy. Assuming you live to 90 you’ll receive total payments of $160,000 over 25 years. This is a return of 60% over 25 years.

Just using simple return, that’s a simple annual return of 2.4% which is much less than the 4% that most agents make it seem you’re getting.  The compounded rate of return on that scenario which gives us much more realistic returns when comparing against other alternatives is 2.02% annually much less then the smoke and mirrors 4%.

Scenario 2

Another example we can use is if you’re 65 and let it defer for 5 years until age 70. By the time you’ve decided to take income, the income value will be around $136,265.13.  At age 70 you can take 6% withdrawals which are equal to $8,175.91. If you take income for the next 15 years until age 85 years old, you’ll receive total income of 122,638.65. By then you’ve earned 22% over a period of 20 years which is under 1% compounded annually! I don’t think agents fully understand these IRR numbers that you’re reading. It’s a lot easier for them to state the big numbers like 4% compounded growth and 6% withdrawal and hope nobody like me does the math! So did you really make 4% guaranteed in those years? Definitely not.

The longer you live, the higher the return you can make, but are you confident that you can afford to make no return in retirement for the first 15 years?

National Western Life Income Outlook Plus 5 Annuity may still have a role, but if you’re counting on the 4% income rider to help you hit the 4% return goal that you need, you may want to look elsewhere. Test this annuity, as part of your retirement income plan, to see if it can help you reach your goals. Often an agent may not realize what I’ve just explained to you.

Consider that if you pass away, your beneficiaries don’t get the income base value that increases by 4% annually. They may be able to get the joint income value.  Compare this money with other safe alternatives.

National Western Life Annuity Income Outlook Plus 5

 

 

 

 

 

Where it Works Best:

  • For Producing a pension like lifetime Guaranteed Income Stream with the Income Rider
  • For those looking for a conservative growth and want to guarantee their principal over a relatively short 7 year period.
  • Those who want to make sure they never lose their principal and will to accept safety over return
  • For those looking for  guaranteed growth to pass money to their heirs  with Inheritance Enhancer or Income Sustainer Plus
  • For those looking for tax deferral and conservative growth

Where it works worst:

  • Those looking for maximum growth
  • Those who need a return on their investment in the first decade of retirement if using Income rider
  • Those who need a return of over 3% annually in retirement to maintain their lifestyle
  • For those who want more clarity in how their cash value will perform

AnnuityEdu’s Summary of the Income Outlook Plus 5 NWL Impact 10 with 7% Premium

National Western Life Annuity Income Outlook Plus 5 has some good and bad features.  It makes me uneasy that the company doesn’t show historical performance. Also the crediting methods are much more confusing than most annuities. Other companies I’ve seen do show historical performance so I don’t think it’s a legal or compliance issue.  It makes me think why don’t they want to show performance? What do they have to hide.

Relative to many annuities on the market, the 10-year surrender is standard. National Western Life has a high amount of income relative to other carriers. Especially with the bonus but overall the internal rate of return is still very low.

This annuity is best for conservative growth. Also, for guaranteeing lifetime income that you can’t outlive no matter how long you live. This annuity should outperform cash and perform.

Buying an Annuity is a long-standing commitment and the decisions you make will determine your success in retirement. It’s imperative to test this annuity versus various others to see which fits your goals and objectives the most. This is something we offer free here at annuityedu.com.

To Conclude

Unfortunately, I believe many agents think that the 4% roll up rate is the rate of return and may not fully understand the real returns that they’ll deliver to you.

We’ll use our proprietary calculator to illustrate for you how this annuity will likely perform in your specific situation.

Click here to Test my Annuity.

If your agent was honest with you, the numbers will match up – if not, well at least you know all of the vital information before you buy.

Have Questions on National Western Life Annuity Income Outlook Plus 5? Have any comments?

Do you have any questions that you can’t seem to find the answer here on our website? [You can send us your questions here via our Free Annuity Help contact form].

National Western Life Annuity Income Outlook Plus 5

 

Purchasing an annuity is often an irreversible decision. Usually you’ll  have high surrender fee’s if you change your mind after you buy.

We hope you found it helpful as you’re conducting your own research on National Western Life Annuity Income Outlook Plus 5.  Thank you for visiting our site.

If you still have questions about this annuity, or you’re an investor that’s still confused about the National Western Life Annuity Income Outlook Plus 5. You can reach out to us by email.  

We can’t always respond right away, but we strive to respond within 24 hours.

 

 

All the best,

 

AnnuityEdu.com

National Western Life Annuity Income Outlook Plus 5

 

 

 

 

 

 


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