American Equity GuaranteeShield 5 Year Fixed Annuity is designed to help you maintain and grow assets through Principal Protection, a guaranteed interest rate, and tax-deferral advantages.
About American Equity Annuities
American Equity Financial Strength
What is a fixed annuity?
A fixed annuity is a contract backed by the financial strength and claims-paying ability of the issuing company. This guarantees contract owners a retirement vehicle designed to protect assets while allowing for growth opportunities. It does this through a combination of powerful benefits:
- Principal Protection
- Guaranteed Income
- Tax-Deferred Growth
- Liquidity
- May Avoid Probate
How a fixed annuity works
This long-term retirement product is purchased with an insurance provider that, in turn, guarantees principal protection and Tax-Deferred Growth on assets. Throughout the course of the contract, the fixed annuity earns additional interest credits based on an established rate.
Benefits
Principal Protection: Fixed annuities are a safe money alternative with guaranteed interest and guaranteed income backed by the financial strength of American Equity.
Guaranteed Income: Flexible payout options available, including lifelong paychecks.
Tax-Deferred Growth: Earn interest on money without paying taxes on it until any distribution occurs. It enables faster growth by allowing credited interest to compound over time.
Liquidity: Each annuity contract defines various opportunities to withdraw funds, such as Free Withdrawals, Partial Withdrawals, and lifetime income options. (Subject to applicable Surrender Charges.)
May Avoid Probate: If applicable, beneficiaries receive any remaining value in the contract while avoiding the expense and time spent in probate.
Money Access Options
Free Withdrawals
This is an opportunity each year (after the first contract year) to take Free Withdrawals up to 10% of the Contract Value.
Market Value Adjustment (MVA)
This product includes a Market Value Adjustment (MVA) Rider. An MVA may increase or decrease the amount of a withdrawal in excess of the Free Withdrawal amount or the Surrender Value. The MVA does not apply to Free Withdrawals, any death benefit, the MGSV, or any distributions occurring after the Surrender Charge Period has ended. In general, as the MVA Index increases, Surrender Values decrease. As the MVA Index decreases, Surrender Values increase.
Enhanced Benefit Rider
The no-fee rider is added to the annuity contract by the Company and may provide additional withdrawal or surrender options.
Qualifying Nursing Care Benefit
After the first contract year, a one-time withdrawal of up to 100% of the contract value is allowed if the owner is confined to a qualified care facility for a minimum of 90 days. Confinement must begin after the contract issue date, and written proof is required from both the qualified care facility and recommending physician.
Terminal Illness Benefit
After the first contract year, a one-time withdrawal of up to 100% of the contract value is allowed if the owner is diagnosed with a terminal illness. The diagnosis must occur after the contract issue date, and written proof with supporting documentation is required from a qualified physician.
Death Benefit
Death Benefit proceeds are paid to the surviving joint owner. If there is no surviving joint owner, the death benefit is paid to the named beneficiary(ies) with no surrender charges. Generally paid in a lump-sum, other payment options are also available.
Life Insurance is also an inexpensive way to leave a death benefit for beneficiaries, tax-free.
Tax Treatment
All income payments are considered a withdrawal from the Contract Value, and any part of the withdrawal that is deferred interest is taxable as income. If the contract is in a qualified retirement plan, the entire amount of the withdrawal may be taxable. The taxation of income payments is calculated as outlined in the Internal Revenue Code. In addition, the taxable portion of any withdrawal taken before age 59½ may be subject to an additional penalty of 10% by the Internal Revenue Service. Please contact a tax professional for additional information.
Retirement Income Planning
If you’re spending the interest from a CD or a fixed annuity to supplement your retirement income, consider a deferred annuity with a lifetime income rider. These annuities would offer a guaranteed income for life (even if the annuity ran out of money), removing the concern of making your money last in retirement and running out of money.
Some lifetime income riders offer a retirement income that increases to keep up with inflation, help pay for long-term care expenses, and offer an enhanced death benefit to help your beneficiaries.
