Our Professional Opinion on the Northwestern Mutual Immediate Income Annuities
Northwestern Mutual’s immediate annuities are not our first recommendation for ordinary lifetime income. They turn your deposit into a stream of payments and give you no cash surrender value. That is a major sacrifice when another annuity may guarantee lifetime withdrawals while leaving an account you can access or leave to family.
We would use Northwestern’s immediate annuity for a specific job: a fixed-period bridge until Social Security begins, an appropriately structured early-retirement plan, or a particular lifetime income need when you are comfortable giving up access. Confirm that the payment option you need is available before committing. Medicaid planning is another possible use only when the actual contract satisfies the applicable state rules.
Northwestern Mutual is a great insurance company. The Northwestern Mutual Life Insurance Company has an A++ (Superior) financial strength rating from AM Best, its highest category. We like that strength behind a lifetime promise, but the strength of the company does not tell you how much income its annuity will pay.
For ordinary lifetime income, start by comparing Northwestern’s guaranteed check against an annuity with a guaranteed lifetime withdrawal benefit. Use the same deposit, ages, payment start date, and single- or joint-life protection. Compare income, access to the remaining account, and the money your family could receive. Neither product automatically pays more.
What We Like
- A great insurer: The issuer has AM Best’s highest financial-strength rating.
- Guaranteed income: A lifetime payment can address the risk of outliving your retirement income.
- A potential dividend: Select Portfolio can provide additional income through dividends, although future dividends are not guaranteed.
- A possible income bridge: A period-certain option, when available, can match a defined gap before another income source begins.
What We Don’t Like
- No cash surrender value: You cannot simply cancel the annuity and get your deposit back.
- Beneficiary protection costs income: Refund and survivor choices can reduce the starting payment compared with life-only income.
- Dividends are uncertain: An illustration with rising dividends is not a guaranteed retirement paycheck.
- The decision is difficult to reverse: Your payment and survivor arrangements must be chosen carefully at purchase.
Northwestern Mutual Immediate Income Annuity Overview
Northwestern offers the Select Immediate Income Annuity and Select Portfolio Immediate Income Annuity. Both are immediate income annuities designed to convert a deposit into scheduled income beginning within one year. The Portfolio version adds the potential for dividends.
The company does not promise an accessible investment balance with these income annuities. You choose an available payment design and receive the payments specified in the contract. Ask for the minimum deposit and payout options available for your state and chosen version before comparing quotes.
Key Features
| Feature | What to know |
|---|---|
| Versions | Select Immediate and Select Portfolio Immediate. |
| Start date | Income begins within one year of purchase. |
| Dividends | Portfolio can pay nonguaranteed dividends. |
| Access | No cash surrender value after issue. |
| Income choices | Confirm available lifetime, survivor, and beneficiary options for the contract and state. |
Select Immediate vs. Select Portfolio
The difference that matters is the Portfolio version’s potential dividend. A declared dividend may be paid as cash, used to purchase additional income, or divided between those choices under the applicable contract terms.
A dividend is not guaranteed. We would compare the guaranteed base payment first. If Portfolio offers less guaranteed income than Select or another insurer, you are relying on future dividends to make up the difference. That may happen, but it is not a safe assumption for expenses you must pay.
A dividend used to purchase additional guaranteed income can increase future payments under the contract. That potential is appealing, but it is not a guaranteed inflation adjustment.
Payment Options and Your Family
Your choice at purchase determines whether income stops when you die or continues for someone else. Availability depends on the specific Northwestern contract and state.
- Life-only: Payments continue for your lifetime but can stop at death even if you received less than your deposit.
- Life with a guaranteed period: Income lasts for life; if death occurs within the selected period, remaining guaranteed payments go to the beneficiary.
- Joint income: The covered survivor can continue receiving income under the chosen survivor terms.
- Refund protection: An available refund option can leave a beneficiary payment if the applicable deposit has not been paid out.
- Period certain only: When available, income lasts for the chosen period rather than life. It can solve a temporary gap but will stop when that period ends.
A higher life-only payment can look attractive, but it stinks if your spouse depends on that income and the checks stop when you die. Compare a joint lifetime payout and the actual survivor percentage. A joint income election is different from continuing a deferred annuity after a spouse’s death; do not assume you can turn this contract back into an accessible account.
Can You Get Your Deposit Back?
Northwestern’s income annuities have no cash value and cannot be surrendered once issued. That means your payment stream is not an emergency fund. Keep money for unexpected expenses and large purchases outside the annuity.
A GLWB can offer a different tradeoff: guaranteed withdrawals for life under its rules, with potential access to the remaining account value. Access can still be subject to surrender charges, and taking excess withdrawals can reduce future guaranteed income. Ask for both the payment and the accessible balance—not just the highest first check.
How We Would Compare the Income
Request immediate annuity quotes from multiple strong companies using the same deposit, age, payment schedule, and beneficiary protection. For Portfolio, ask for guaranteed payments separately from the nonguaranteed dividend illustration.
The annual payout divided by your deposit is not an interest rate. Income payments include a return of your deposit, and lifetime payments depend on how long the covered person lives. An annuity income calculator can help you explore payment choices, but an actual quote is needed for the contract you select.
Our Final Verdict
Northwestern Mutual is a great insurer, but we would not make its immediate income annuity the default choice for lifetime income. The loss of access is too important to overlook. We would first compare a lifetime withdrawal benefit and then use Northwestern’s SPIA when a specific income job and the guaranteed quote justify giving up the deposit.
Contact The Annuity Expert for free annuity quotes. We can compare guaranteed payments, access, and beneficiary protection for your retirement plan.
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