Our Professional Opinion on the Athene Activate SPIA
We recommend the Athene Activate SPIA only when an immediate annuity solves a specific income-planning problem. Activate is one of the better-designed SPIAs because it offers a broad selection of income and beneficiary options, an optional annual payment increase, and limited access to the present value of certain future payments. Even with those features, we do not use a SPIA as our default lifetime-income recommendation.
Athene is one of the best annuity companies. The company has strong financial ratings and comfortably meets our minimum standard.
We would primarily consider Athene Activate for three situations.
- An early retiree using non-qualified money before age 59½: A properly structured SPIA can create immediate income without treating each payment like an ordinary early annuity withdrawal. This can be useful when someone retires before other income sources begin. A life-only SPIA may also be paired with life insurance when replacing the lost legacy value is important.
- A Social Security income bridge: Activate offers period-certain payments from 5 to 30 years in annual increments. That makes it useful for creating a temporary paycheck between retirement and a later Social Security claiming date. The payments continue for the selected period even if the annuitant dies, so the remaining guaranteed payments can go to the beneficiary.
- Medicaid planning: A SPIA may be useful when it is specifically structured as a Medicaid-compliant annuity. Activate should not be assumed to qualify automatically. The contract, payout period, ownership, beneficiary language, and state requirements must all be reviewed before it is used for Medicaid eligibility planning.
For ordinary lifetime income, we generally prefer comparing Activate with a fixed indexed annuity offering a guaranteed lifetime withdrawal benefit. A competitive GLWB may provide equal or higher guaranteed income while preserving an account value, penalty-free access, potential growth, a death benefit, and more flexibility if the retirement plan changes.
Do not assume Activate pays more simply because it is a SPIA. The payout needs to be compared with other immediate annuities and GLWB annuities using the same premium, age, state, income start date, payment frequency, single- or joint-life structure, survivor percentage, and beneficiary protection.
Activate provides several ways to protect a spouse or beneficiaries. Options include period certain, installment refund, cash refund, joint lifetime income, and joint lifetime income with refund or guaranteed-period protection. The joint-life payment can continue at 100%, 66.67%, or 50% after the first death, depending on the option selected.
The spouse and beneficiary protection must be explained before comparing payouts. A life-only quote should not be compared with a joint-life or refund quote and described as better simply because the payment is higher. With life-only, payments stop at death, and no death proceeds are paid. If death occurs early, total payments can be less than the original premium.
The Annual Automatic Increase Option can raise payments by a selected whole percentage each year. We like having that choice, but it is not automatically better. The starting income is lower, so the level and increasing options should be compared using cumulative income and the actual break-even year.
Activate also provides more liquidity than a typical SPIA, but the access is still limited. Eligible non-qualified owners age 59½ or older may take one withdrawal from the present value of remaining guaranteed payments after the first contract year. The feature is not available with life-only or joint-life-only payments or with IRA contracts. Using it reduces future payments during the applicable liquidity period, and a full withdrawal under the period-certain option terminates the contract.
Bottom line: Athene Activate is a good SPIA for a narrow use case, not our default lifetime-income solution. We like it for an early-retirement strategy using non-qualified money, a fixed-period Social Security bridge, or a properly structured Medicaid-compliant annuity. For ordinary lifetime income, compare it with a competitive GLWB before permanently exchanging the premium for an income stream.
What We Like
- Financially Strong Insurer: Athene comfortably exceeds our A- minimum.
- Broad Payment Selection: Activate offers life-only, joint-life, period-certain, installment-refund, and cash-refund choices.
- Flexible Social Security Bridge Terms: Period-certain payments are available from 5 to 30 years in annual increments.
- Clear Spousal Continuation Choices: Joint payments can continue at 100%, 66.67%, or 50% after the first death.
- Optional Increasing Income: Payments can increase automatically each year when the feature is selected at issue.
- Refund Options: Cash-refund and installment-refund choices can protect some or all of the unpaid premium for beneficiaries.
- Beneficiary Lump-Sum Choice: With eligible guaranteed-payment options, beneficiaries may elect the present value of remaining payments instead of continuing the income stream.
- Limited One-Time Liquidity: Eligible non-qualified contracts provide access to part of the present value of remaining guaranteed payments.
- Flexible Payment Start: Income can begin on a selected date and may be deferred for up to 12 months from application.
What We Don’t Like
- The Decision Is Generally Permanent: Once the payout option begins, the owner normally cannot change the structure or reclaim the premium.
- No Normal Account Liquidity: The contract does not retain an accessible account value like a deferred annuity with a GLWB.
- Life Only Can Leave Nothing to the Family: Payments stop at death, and total income can be less than the original premium.
- Stronger Beneficiary Protection Reduces Income: Joint-life, period-certain, and refund guarantees generally require accepting a lower starting payment.
- Increasing Income Starts Lower: The annual increase option needs to be compared using cumulative payments and a break-even calculation.
- The One-Time Withdrawal Is Restricted: It is unavailable on IRA contracts and life-only or joint-life-only options, requires the owner to be at least age 59½, and reduces future payments.
- A SPIA Does Not Automatically Pay More: A competitive GLWB may provide equal or higher income while preserving substantially more flexibility and beneficiary value.
What Is the Athene Activate SPIA?
The Athene Activate is a Single Premium Immediate Annuity (SPIA), designed to turn a lump-sum investment into a guaranteed stream of income that begins within 12 months of purchase. This annuity is issued by Athene Annuity and Life Company and backed by a strong financial foundation, with A+ ratings from AM Best, S&P, and Fitch, and an A1 rating from Moody’s.
Buying Tip: If you are evaluating the Athene Activate SPIA, annuities that start income immediately are worth comparing against both SPIAs and immediate-withdrawal GLWBs because the highest initial payment is not always the best overall retirement outcome.
How It Works
You invest a single premium—minimum $10,000, maximum $1,000,000 (more with approval)—and choose an income option. Payments begin almost immediately or can be delayed for up to 12 months. You can choose monthly, quarterly, semiannual, or annual payouts.
Available payout options include:
- Period Certain Only (5–30 years): Guaranteed payments for a fixed time.
- Single Life Only: Payments stop upon the annuitant’s death—highest payout.
- Single Life with Period Certain or Refunds: Adds beneficiary protections.
- Joint Life and Last Survivor (with or without refund options): Ideal for couples.
Unique Features of Athene Activate
- Annual Automatic Increase Option: Payments grow by 1–5% annually (must elect at issue).
- Lump Sum Death Benefit Option: Beneficiaries can take the present value of remaining payments.
- One-Time Withdrawal Option: Withdraw up to 90% of the present value during the “liquidity period” (available for non-qualified contracts only).
- Flexible ownership: Available to individuals, trusts, and companies, with various ownership and annuitant configurations.
Pros and Cons
Pros:
- Guaranteed income for life or a set term
- Optional payment growth through annual increases
- Strong financial ratings and insurer stability
- Customizable payout options with beneficiary protections
- Optional one-time liquidity withdrawal feature
- No market risk
Cons:
- Irrevocable decision—once income starts, you lose access to the lump sum
- Not suitable for growth or legacy planning without refund features
- Most options are inflexible compared to GLWB annuities
- Liquidity features limited to specific contract types
- Payments stop at death without a refund feature (for life-only options)
Who Should Consider This Annuity?
Ideal For:
- Early retirees under age 59½ who need income immediately and can avoid IRS penalties by using a non-qualified SPIA paired with life insurance
- Medicaid planning scenarios that require annuitized income streams
- Conservative investors who want pension-like income and are not concerned with leaving a legacy
Not Ideal For:
- Investors under 59½ using IRA funds (due to 10% early withdrawal penalty)
- Those who want control over their money or access to their principal
- Individuals seeking growth, flexibility, or inflation protection without electing the annual increase option
What Happens After the Annuity’s Term Is Met?
If you selected a period certain payout, payments stop at the end of that term. If you chose a life-only option, payments continue as long as you (or both annuitants, in a joint option) live. After the last guaranteed payment, no further funds are paid unless a refund rider was added. The annuity ends when all obligations are fulfilled.
Related Insurance Products to Consider
- Life Insurance: To replace assets lost due to annuitization, especially with life-only SPIAs.
- Long-Term Care Insurance: Since SPIAs tie up liquidity, having separate LTC coverage is essential.
- Deferred Annuities with GLWB: Better suited for those needing flexibility, control, and inflation protection with the ability to start and stop income.
Final Verdict
The Athene Activate SPIA is a solid income-generating annuity for specific use cases, especially early retirement income before age 59½ or Medicaid planning. However, it lacks the flexibility and control of deferred annuities with GLWBs. You should only consider this product if you fully understand and accept the limitations of immediate income annuitization.
Need Help Comparing SPIAs or GLWBs?
Contact The Annuity Expert to compare SPIAs, deferred annuities, and guaranteed income riders. We’ll provide free quotes to help you buy the right annuity for your retirement strategy.
Book A Free Consultation
Get help from a licensed financial professional. This service is free of charge.
Let Us Answer Your Questions
Not quite ready for a meeting, but you have a question that needs answering? We’re happy to help. Leave an inquiry below, and one of our staff will respond via email.