If you're concerned about saving enough for retirement – and you also want an opportunity for lifetime income withdrawal payment increases – Allianz 360 Annuity and its 360 Benefit rider may be a good choice.
Allianz 360 Annuity provides the typical features of fixed index annuities – including principal protection from market downturns, the potential for tax-deferred growth, options for lifetime retirement income, and a death benefit for your beneficiaries.
While you’re saving for retirement, Allianz 360 Annuity and the 360 Benefit rider help you in three ways, by:
- providing the opportunity for indexed and/or fixed interest,
- giving you an interest bonus equal to 25% of the interest that is credited to your contract until withdrawals begin, and
- beginning at age 40, increasing your income withdrawal percentage with every year you hold your contract before starting income withdrawals.
And when you’re ready to start receiving income, the 360 Benefit rider lets you choose from two lifetime income withdrawal option, beginning at age 50:
- You can elect predictable income, or
- choose income that can increase each year.
Bonus annuities may include higher surrender charges, longer surrender periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don’t offer a bonus. The bonus is credited each year the selected allocations earn interest. During the first 10 contract years, we will apply a surrender charge if the contract is partially or fully surrendered. These charges may result in a loss of indexed interest and fixed interest interest bonus and a partial loss of principal (premium).
Issue age and minimum
The minimum initial premium payment is $20,000 for qualified and nonqualified money.
We'll add a 25% interest bonus to any fixed or indexed interest earned, and credit it to the accumulation value of the 360 Annuity contract until you begin lifetime withdrawals, or until the 360 Benefit rider is terminated, whichever comes first. The interest bonus will be calculated after any cap or spread is applied. During the first 10 contract years, we will apply a surrender charge if the contract is partially or fully surrendered. These charges may result in a loss of, indexed interest and fixed interest, interest bonus and a partial loss of principal (premium).
The participation rate is 100% guaranteed for the life of the contract. This means we use the entire percentage of index change when we calculate the indexed interest rate. Caps or spreads would still apply. The cap is the maximum percentage of index change we use for a specified time period to determine how much interest we credit to your annuity in a given contract year. A spread is the amount we subtract from the percentage of change calculated for an index to determine how much interest we credit to your annuity in a contract year.
Call your Allianz financial professional for current caps, spreads, and interest rates.
Monthly sum: S&P 500® Index, Nasdaq-100® Index, Russell 2000® Index
Annual point-to-point with a cap: S&P 500® Index, Nasdaq-100® Index, Russell 2000® Index, Barclays US Dynamic Balance Index II, PIMCO Tactical Balanced Index, blended index
Annual point-to-point with a spread: Barclays US Dynamic Balance Index II, PIMCO Tactical Balanced Index
Monthly average: Blended index
The blended index is comprised of Dow Jones Industrial Average (35%), Barclays US Aggregate Bond Index (35%), EURO STOXX50® Index (20%), and Russell 2000 Index (10%).
A fixed interest allocation is also available.
Income or accumulation benefits
The 360 Benefit rider is issued with the Allianz 360 Annuity for an additional charge. It can help you address both halves of retirement: accumulating retirement savings and receiving income in the form of lifetime withdrawals. It offers an interest bonus and increasing income withdrawal percentages (beginning at age 40) until income payments begin. It also offers a choice of two income payment options beginning at age 50: predictable payments and payments with the opportunity to increase.
Beginning at age 40, the 360 Benefit rider lifetime withdrawal percentages will automatically increase each year you hold the contract, until income payments begin. The base payment percentage is determined by your age at the time you purchase the annuity. Starting at age 50 the base payout percentages increase 10 bps for every year of age at issue. (for example, payout option 1, age 50 base = 3.80%, age 51 base = 3.90%, etc.).
The annual cost of the rider is 1.15% of the accumulation value, deducted on a monthly basis from Allianz 360 Annuity's accumulation value and guaranteed minimum value (in most states). The rider charge will continue for the life of the contract even after lifetime income payments have begun.
You can cancel this rider at any time after the fifth contract year. Once the rider is canceled, it may not be reinstated. If the rider is canceled, you will no longer receive interest bonuses from that point forward and will lose the ability to take lifetime withdrawals. Annuitization, however, is still available. If the rider is cancelled, the only benefit of paying for the rider would be the interest bonuses that were credited up until the point the rider was cancelled.
Access your money
After the first contract year, up to 10% of the contract's premium paid, minus withdrawals, can be withdrawn each contract year without incurring surrender charges or market value adjustment (MVA) or penalties as long as the money is withdrawn after the contract anniversary following the most recent premium payment; maximum is cash surrender value.
10-year surrender period (10%, 10%, 10%, 8.75%, 7.50%, 6.25%, 5.00%, 3.75%, 2.50%, 1.25%, 0%); beginning in contract year 4, the surrender charge decreases 1.25% on each contract anniversary. At the beginning of the 11th contract year, the surrender charge will be zero. The surrender charge and surrender charge period apply to the accumulation value, which does not include the premium bonus or the interest bonus. These surrender charges may vary by state.
Market Value Adjustment (MVA): If the contract is partially or fully surrendered (not including 10% free withdrawals and Required Minimum Distributions), it will be subject to an MVA during the surrender charge period. An MVA will also apply if the contract is annuitized prior to the sixth contract year or if annuity payments are taken over a period of less than 10 years. The MVA reference rate is a component used to calculate the MVA. For additional information on MVAs and their calculation, see the contract Statement of Understanding.
Payout option 1 offers predictable income payments, so you will have the reassurance of knowing exactly how much each payment will be for the rest of your life.
Payout option 2 offers the potential for income payment increases based on changes in fixed or indexed interest allocations. On every contract anniversary, the previous year’s income payment will be recalculated to reflect the interest rate from your chosen allocations, which means the income payment amount has the potential to increase every year. Income payments under option 2 will start out lower than income payments under option 1.
The contract’s accumulation value prior to annuitization, including credited interest bonus, is available as a lump sum or as annuity income payments over at least five years.
Current MVA reference rate: 2.30 % as of 8/29/2016
Uses the yield of the Barclays US Intermediate Corporate Bond Index.
Talk to your financial professional to see if Allianz 360 Annuity is appropriate for you. Here are some questions they can help answer:
- How are the annuity’s principal and any credited interest protected?
- How can this product provide income for life and assist with the rising cost of living?
- What backs up any guarantees available with this product?
- What else should I consider that might impact my retirement?