Design your retirement solution with the AIG American Pathway Fixed 5 Annuity. With the American Pathway series of fixed annuities you can expect:
- PROTECTION from market volatility
- Tax-deferred GROWTH
- GUARANTEED interest earnings
- ACCESS to your money
About AIG Annuities
Accumulate Savings Faster
Tax deferral is a key benefit that can help your savings accumulate at a faster rate than it would in a comparable taxable account. That’s because you won’t have to pay current taxes on any interest or earnings until withdrawal.
With the AIG’s American Pathway Fixed 5 annuities, you have the power of tax-deferred compounding interest working for you whether you purchase the annuity with after-tax (non-qualified) or pretax (qualified) monies.
The Power of Tax-Deferred Growth
While your money remains in the annuity, the principal and gains earn a fixed rate of interest. Money that otherwise would have gone toward federal taxes stays in the annuity, earning interest.
Once your contract is issued, 100% of your money begins earning interest. No initial sales charges or annual fees are associated with the American Pathway Fixed 5 annuity.
Interest is credited to the contract daily (based on a 365-day year) to achieve an annual yield that’s equal to the declared rate. The money must remain in the annuity (without any withdrawals) for the entire year to achieve the full rate.
When the initial interest rate period expires, future interest rates will be declared annually, based on current market conditions. The current initial interest rate is subject to change at any time before the contract is issued.
Design Your Retirement Solution
You have the flexibility to choose:
- One or three-year guaranteed interest rate term on both annuities
- The American Pathway Fixed 5 also offers a five-year guaranteed interest rate term
- The American Pathway Fixed 7 also offers a seven-year guaranteed interest rate term
- A higher guaranteed interest rate option on:
- The American Pathway Fixed 5 Annuity five-year term with market value adjustment (MVA)
- The American Pathway Fixed 7 Annuity seven-year term with market value adjustment (MVA)
- A guaranteed return-of-premium option
- Guaranteed lifetime payout options
A fixed annuity with an MVA option typically offers a higher interest rate than a fixed annuity of the same time period without the option.
However, if you select the interest rate option with MVA, withdrawals exceeding the penalty-free amounts during the MVA term will be subject to a market value adjustment in addition to standard contractual withdrawal charges.
The five-year MVA option is only available with the American Pathway Fixed 5 Annuity and the seven-year MVA option is only available with the American Pathway Fixed 7 Annuity.
Access Your Money
Up to 15% Penalty-Free Withdrawals Each Year
After 30 days from the contract date, you may take multiple free withdrawals each year, not exceeding in total the greater of the accumulated interest earned or up to 15% of the previous anniversary contract value.
If you don’t need to use all of the 15% penalty-free withdrawal privilege percentages in a contract year, you may carry over the unused portion (up to 5%) to the next contract year, increasing the annual withdrawal to 20% of the anniversary contract value (or the accumulated interest if greater).
You can always withdraw more than the penalty-free amounts at any time.
However, during the first five contract years of the American Pathway Fixed 5 and the first seven contract years of the American Pathway Fixed 7 annuities, the amount withdrawn over the penalty-free amounts will incur a withdrawal charge (and MVA if applicable), which can reduce the value of your contract.
If you take a partial withdrawal, ensure your remaining contract value is at least $2,000. If the partial withdrawal reduces the contract value below $2,000, AGL reserves the right to pay the entire contract value and terminate the contract.
Decreasing Withdrawal Charges
As you can see below, the withdrawal charge decreases to zero after five or seven years from the contract date, depending on the annuity contract you purchase.
The withdrawal charge is a percentage of the amount withdrawn in excess of penalty-free amounts (before application of any MVA) during the withdrawal charge period only.
After the withdrawal charge period, no MVA or withdrawal charge will apply to any withdrawals.
Market Value Adjustment
If you select the five-year or seven-year interest rate option with MVA, a market value adjustment applies to withdrawals taken during the initial interest rate guarantee period which exceeds penalty-free amounts.
The adjustment can either increase or decrease the withdrawal amount depending on the current interest rate environment.
When interest rates at the time of the withdrawal are higher than the level at the time the contract is issued, the MVA will result in a decrease. If interest rates are down, the MVA will increase the withdrawal amount.
Should an MVA decrease apply, the amount charged will not result in your receiving less than the minimum withdrawal value as defined in your contract.
MVA does not apply to withdrawals representing penalty-free withdrawal amounts, RMDs, annuitization, or death benefit.
The Return of Premium Guarantee
Both the American Pathway Fixed 5 and Fixed 5 annuities offer an optional return-of-premium guarantee at the time of purchase.
Adding this feature will slightly lower your initial interest rate.
With the return-of-premium guarantee option, if you cancel the annuity contract, you will always receive the greater of:
- Your single premium less prior net withdrawals
- Contract value minus any applicable withdrawal charges or MVA
- The minimum withdrawal value
Protection For Your Family
American Pathway Fixed 5 and Fixed 7 annuities can also help protect your family with a death benefit.
The death benefit guarantees your specified beneficiary will be paid the greater of the annuity value – without any withdrawal charges (or MVA if applicable) or the minimum withdrawal value.
Generally, designating annuity beneficiaries other than your estate avoids the costs and delays of probate.
American General (AIG) Life Insurance is also an inexpensive way to leave a death benefit to beneficiaries.
Choice For Your Retirement Income
American Pathway Fixed 5 and Fixed 7 annuities can help provide confidence that when retirement comes, you’re prepared.
You choose how and when to receive income based on your life needs.
- If you want to convert your annuity into a series of fixed payments (annuitization) and choose an option that provides guaranteed lifetime income
- When to begin receiving annuity payments and which payment option best suits you
- The amount of each payment (based on the payout option selected) during the payout phase
Withdrawal Charge Waivers
It’s difficult to predict the future. You may have an emergency during the withdrawal charge period.
That’s why we offer options – for your “just in case” moments.
The following riders allow you to make withdrawals without a withdrawal charge or MVA when certain conditions are met.
There is no charge for these riders.
Details about utilizing the riders, including qualifying conditions and waiting periods, are set forth in the riders.
These riders are not available in all states.
The owner must receive extended care for at least 90 consecutive days, beginning after the first contract year. Extended care may not have begun before the contract date.
The owner must be initially diagnosed with a terminal illness after the contract date. Only one partial or a full withdrawal is permitted.
Activities of Daily Living
The owner must be unable to perform at least two of the six activities of daily living for at least 90 consecutive days, beginning after the first contract year.
If you choose to convert the annuity into a series of fixed payments
During the annuity’s payout period, you’ll begin to receive a series of payments. Once payments begin, the payout option cannot be changed.
Provides income payments for as long as the annuitant (the person who is entitled to receive benefits from the annuity) lives. Income payments end upon the annuitant’s death. If Joint and Survivor, income payments end upon death of the survivor.
Life Only with a Guaranteed Period
Payments are guaranteed for as long as the annuitant lives. If the guaranteed period has not expired at the time of death, payments will continue to the beneficiary (or survivor if Joint and Survivor) for the remainder of the guaranteed period.
Fixed Period of Time
Equal periodic payments are made for a fixed period of five to 20 years. The total of all premium and interest will be distributed during the period of time elected.
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.