What Should I Do With My MasterDex Plus Annuity?
The Allianz MasterDex Plus Annuity is a flexible premium deferred fixed index annuity that was designed to offer retirement income with a combination of protection, growth potential, and flexibility. Although it was a popular option for individuals seeking to accumulate assets for retirement while minimizing market risk, it is important to note that this specific annuity product is no longer being sold. If you own a MasterDex Plus Annuity and are wondering what steps to take next, this guide will help you understand your options.
Key Features of the MasterDex Plus Annuity
- Principal Protection: Your principal is protected from market losses. Even if the market index declines, your contract values cannot decrease due to market performance.
- Interest Potential: Interest is credited based on changes in selected market indexes (e.g., S&P 500, Nasdaq-100®, and FTSE 100). Indexed interest is subject to caps or spreads, ensuring some growth potential during market upswings.
- Tax-Deferred Growth: The annuity offers tax-deferred accumulation, meaning you don’t pay taxes on the interest earned until you make withdrawals.
- Death Benefit: If you pass away before receiving annuity payments, your beneficiary will receive the greater of the contract’s accumulation value or guaranteed minimum value without the delays and costs of probate.
- Flexible Income Options: After the accumulation phase, you can choose from various income options, including lifetime income, period-certain payments, or lump-sum withdrawals.
- Free Withdrawals: Once the initial waiting period has passed, you can take up to 10% of your total premiums annually without incurring surrender charges.
- Surrender Charges: During the first seven contract years, withdrawals exceeding the free withdrawal limit are subject to surrender charges. These charges decrease over time and are eliminated after seven years.
What Are My Options?
Since the Allianz MasterDex Plus Annuity is no longer available for new purchases, it’s crucial to evaluate whether it still meets your financial goals. Here are some common options to consider:
1. Keep Your Annuity
If your MasterDex Plus Annuity is performing well and aligns with your retirement strategy, keeping it may be a good option. The annuity offers principal protection, potential indexed interest, and tax deferral, which can continue to benefit your financial plan.
2. Take Withdrawals
You can begin taking withdrawals either as free withdrawals (up to 10% annually) or as annuitized income. Keep in mind that any withdrawals before age 59½ may be subject to a 10% federal tax penalty in addition to ordinary income tax.
3. Exchange Your Annuity (1035 Exchange)
If your financial goals have changed or you want to explore newer annuity products with better terms or features, you might consider replacing your MasterDex Plus Annuity through a 1035 exchange. This allows you to transfer your annuity tax-free into a new annuity that may offer:
- Higher interest caps or lower spreads
- Enhanced income riders
- Greater flexibility and lower fees
Before making a decision, it’s essential to understand the terms of your existing annuity, including any surrender charges or fees that may apply.
Need Help? Contact Us at The Annuity Expert
Deciding what to do with your MasterDex Plus Annuity can be complex. Whether you need help understanding your current annuity, have questions about your options, or are considering replacing your annuity with a new one, we are here to help.
At The Annuity Expert, our team can:
- Answer any questions about your MasterDex Plus Annuity.
- Provide a comparison of current annuity products that may better suit your needs.
- Assist you with a 1035 exchange if you decide to replace your annuity.
Contact us today for a no-obligation consultation.
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