Is the Nationwide Income Promise Select Annuity Any Good?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

The Nationwide Income Promise Select Annuity is a fixed immediate annuity offered by Nationwide. It provides a guaranteed and stable income stream that can start immediately in exchange for a single lump-sum payment. The payment amount is set and cannot be affected by market fluctuations, ensuring that your retirement income is shielded from market risk. Additionally, if you invest money you’ve already paid taxes on, part of each guaranteed payment will be tax-free. This annuity is designed to provide retirement income for as long as you need it, making it a suitable option for retirement planning.

Key Takeaways:

  • The Nationwide Income Promise Select Annuity is a fixed immediate annuity offered by Nationwide.
  • It provides a guaranteed and stable income stream
  • The payment amount is not affected by market fluctuations
  • Part of each guaranteed payment may be tax-free if you’ve already paid taxes on the invested money
  • Designed to provide retirement income for as long as you need it
Nationwide Income Promise Select Annuity Review

Key Features and Benefits of the Nationwide Income Promise Select Annuity

The Nationwide Income Promise Select Annuity offers several key features and benefits that make it a valuable option for retirement planning. As a fixed immediate annuity, it provides guaranteed income for as long as needed, ensuring financial security during retirement.

Liquidity Feature

One notable feature of the Nationwide Income Promise Select Annuity is its liquidity feature. This allows you to withdraw up to 100% of the liquidity value of your guaranteed payments at any time during the liquidity period. This flexibility provides access to your money when needed, offering peace of mind and financial stability.

Cost-of-Living Adjustment (COLA)

Another significant benefit of this annuity is electing a cost-of-living adjustment (COLA) at contract issuance. With COLA, you can increase your annual payment by a chosen percentage compounded annually (1%, 2%, 3%, 4%, or 5%). This adjustment helps protect your income against inflation, ensuring that your purchasing power remains intact.

It’s important to note that the availability of COLA percentages may vary based on the contract’s tax status and the contract owner’s age. Consulting with a financial advisor can help you determine the most suitable COLA option for your needs and circumstances.

Guaranteed Income and Stability

The Nationwide Income Promise Select Annuity gives you the peace of mind of a guaranteed income stream. By converting a lump-sum payment into regular payments, you can ensure a consistent and reliable source of income throughout your retirement.

Key FeaturesBenefits
Liquidity Feature– Provides the flexibility to withdraw up to 100% of the liquidity value of your guaranteed payments
Cost-of-Living Adjustment (COLA)– Protects your income against inflation by increasing your annual payment based on a chosen percentage
Guaranteed Income and Stability– Ensures a consistent and reliable income stream throughout retirement

By considering the key features and benefits of the Nationwide Income Promise Select Annuity, you can decide whether it aligns with your retirement goals and financial needs.

Nationwide Income Promise Select

Considerations and Potential Drawbacks of the Nationwide Income Promise Select Annuity

While the Nationwide Income Promise Select Annuity provides guaranteed income and a range of features, it’s crucial to consider certain potential drawbacks before making a purchase decision.

One important aspect to be aware of is that, like other annuities, this annuity may have associated fees and taxes. When you make withdrawals from an annuity, they are typically taxed as ordinary income. It’s essential to remember that if you are younger than 59½, you may also face a 10% federal tax penalty in addition to the ordinary income taxes.

Another consideration is the tax implications of the annuity’s death benefit. While the death benefit can provide financial support to a named beneficiary, it’s important to note that it may be subject to taxation when paid out.

Before committing to the Nationwide Income Promise Select Annuity, it is highly recommended to thoroughly review the specific fees, charges, and conditions associated with the product. By understanding the potential expenses and tax obligations, you can make an informed decision that aligns with your long-term financial goals.

Nationwide Immediate Annuities

What We Like

Nationwide, established in 1981, stands out for its strong financial stability and commendable ratings from various reputable agencies. With an A.M. Best rating of A+, Moody’s rating of A1, and Standard & Poor’s rating of A+, Nationwide demonstrates a high level of financial strength and creditworthiness. These ratings reflect the company’s ability to meet its ongoing insurance obligations, which is a crucial aspect for clients looking for reliability and security in their financial dealings.

What We Don’t Like

However, there are aspects of Nationwide’s annuities that are less appealing. Specifically, the annuities that require retirees to relinquish control over their assets are a significant drawback. These annuities often do not earn interest, offer minimal liquidity, and lack a lump sum death benefit. These limitations can be major deterrents for retirees seeking both financial security and flexibility.

Our Recommendations

In light of these concerns, we recommend exploring the option of a fixed-indexed annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB). This type of annuity allows for immediate income commencement, which benefits retirees needing stable income streams. Importantly, a GLWB enables the owner to maintain control over their assets, providing a more balanced approach to retirement planning. This type of annuity also addresses the limitations found in some of Nationwide’s offerings, as it can offer increased income to keep pace with inflation, the opportunity to earn interest, improved liquidity, and the availability of a lump sum death benefit. These features make fixed-indexed annuities with a GLWB a compelling choice for those seeking a blend of security and flexibility in their retirement planning.

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Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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