The Allianz 360 Annuity with the 360 Benefit rider (360 Benefit) helps address both halves of the retirement equation. It offers you an interest bonus to help you accumulate money for retirement. And it also offers you guaranteed lifetime withdrawals – plus the opportunity for increasing income.
Like many Americans, you may be concerned about saving enough for retirement. Choosing an income strategy to help you find a level of financial certainty is important. A fixed index annuity may be one solution.
Buying an annuity is one way to build your retirement assets.
- Fixed annuities offer principal protection and potential interest to help you accumulate money for your retirement.
- The money in your annuity can grow tax-deferred, which may help your savings accumulate faster.
- Fixed annuities also offer valuable guarantees and death benefit protection.
- If you surrender your contract, you’ll receive at least a guaranteed minimum value.
- And because annuities are insurance products, they can give you the reassurance of knowing that your beneficiaries will get a death benefit if you pass away before you start receiving annuity payments.
Finally, annuities give you several income options once you’re ready:
- You can receive income as a single payment, as regular payments over a specific period of time, or even as income for life.
- These are just a few of the reasons why many people rely on annuities to help them achieve their long-term financial goals.
Fixed index annuities offer additional benefits.
In addition to the benefits we’ve just discussed, a fixed index annuity has the potential to earn interest based on changes in an external market index.
This is different from traditional fixed annuities, in which credit interest calculated at a fixed rate set in the contract. Because the chosen index varies daily and is not predictable, the interest you earn through a fixed index annuity could be more or less than the interest from a traditional fixed annuity. Many fixed index annuities also let you allocate premium to a traditional fixed interest option, where interest is credited at a fixed rate.
Regardless of whether you choose a fixed interest, indexed interest, or a combination of both, an annuity’s benefits can make it a valuable part of your overall retirement strategy.
Retirement in America is changing. Has your retirement savings strategy kept up?
Just a generation or two ago, Americans had several sources of guaranteed income in retirement. But the pensions that once provided income for retirees are now rare. And Social Security – which was always intended to be a small piece of the retirement-income picture – is continuing to erode. The result is that Americans are increasingly responsible for funding and protecting their own retirement. That’s why saving enough for retirement is more important than ever.
Allianz 360 can help.
Allianz 360 Annuity is designed to help you accumulate money for retirement in three ways.
- First, it provides the opportunity for indexed interest.
- Second, the 360 Benefit gives you an interest bonus while you’re accumulating, equal to 25% of the interest rate that is credited to your contract.
- And third, it protects your principal and any credited interest (your accumulation value) from market losses.
Any fixed or indexed interest your annuity earns (including the interest bonus) is credited to your accumulation value and is locked in each year.
During the first 10 contract years, we will apply a surrender charge if you partially or fully surrender your contract. The same would apply if you begin annuitization prior to the sixth contract year (or for fewer than 10 years). These charges may result in a loss of previously credited fixed or indexed interest (including the interest bonus), and a partial loss of principal.
*Note that if you begin receiving income immediately, no interest bonuses will be credited.
Planning for income in retirement
It’s no longer enough to simply save money – now you need an income strategy, as well. That’s because you could face several risks in retirement.
The first of these is longevity.
Our increasing life expectancies mean that the number of years we spend in retirement is steadily growing, even as the average retirement age inches higher. That’s why it’s important to have an income strategy that guarantees at least some income for as long as you live.
The second risk to your retirement is inflation:
History has shown that the cost of goods and services will likely increase. The problem is that – without an adequate income strategy – your retirement income will likely remain steady. That’s why it’s also wise to have an opportunity for increasing income payments in retirement.
Finally, there’s a possibility that you’ll make a mistaken “consumption assumption” about your retirement income needs.
You may have heard a rule of thumb that most people generally need about 70-80% of their pre-retirement income to maintain their standard of living in retirement. But some retirees are surprised to discover that their actual income needs are higher.
Allianz 360 and the 360 Benefit can help address these retirement risks by providing income for life – through income withdrawals or annuity payments – and the option for income withdrawals that can increase, even after retirement.
Opportunities for income increases
As we’ve just discussed, it’s important to have an opportunity for income increases in retirement. The 360 Benefit provides this in two ways.
- First, beginning at age 40, it gives you a guaranteed increase in your lifetime withdrawal percentage while you’re still saving for retirement.
- Second, the 360 Benefit also gives you two lifetime income withdrawal options to choose from, including payments that have the opportunity to increase each year.
Lifetime withdrawal percentage increases while saving for retirement
Beginning at age 40, we’ll automatically increase your contract’s lifetime withdrawal percentage each year you allow your contract to accumulate. So, the longer you hold off on receiving income withdrawals from your contract, the higher your income withdrawal payments will be.
The 360 Benefit offers two income withdrawal options that can help you address the most common retirement income concerns – plus the flexibility to choose the income option that best fits your needs. You can start lifetime withdrawals at age 50 or older.
Income option 1
Option 1 gives you a predictable, dependable income for life.
Income option 1 may be a good choice if you want the reassurance of knowing exactly how much income you’ll receive every month, and if you want a guaranteed stream of income that you can’t outlive.
Income option 2
Option 2 also provides income for life – plus an opportunity for payment increases. Income option 2 offers a smaller payment upfront, but it has the potential to increase each year by the interest rate credited to your allocation options in your contract.
Cumulative withdrawal amount
Once you begin taking lifetime income payments, you can choose to take less than your maximum withdrawal amount (income payment). We keep track of the amount that’s “leftover.” The amount that is left over is called the cumulative withdrawal amount.
This feature allows you to take any or all of that remainder at any time.
The cumulative withdrawal amount is not subtracted from the accumulation value until taken out. The accumulation value will continue to earn interest credits, but the cumulative withdrawal amount will not increase with interest earned.
You can also annuitize your contract.
You can choose to receive annuity payments based on your choice of several annuity options. If you use a traditional annuitization option after five contract years, your annuity payments are based on your accumulation value, which includes the interest bonuses.
These annuity options can have certain tax advantages.
Protection and flexibility
Allianz 360 offers many other valuable benefits and guarantees.
Enjoy principal protection.
With Allianz 360, your principal and credited interest are never at risk of market losses. That’s because you’re not actually buying any shares of a stock, bond, or index – so a market downturn cannot reduce your contract values.
Have the reassurance of a death benefit.
If you die before you start receiving annuity payments, your beneficiary(ies) will receive a death benefit. The death benefit will be the greater of your annuity’s accumulation value, guaranteed minimum value, cumulative withdrawal amount, or your premium minus any withdrawals and corresponding surrender charges (the net premium). Your beneficiary(ies) can choose to receive your contract’s death benefit either as a lump sum (a single payment) or as annuity payments over five years or longer.
Allianz 360 is designed to help you accumulate savings for retirement. That’s why we give you the flexibility of making additional premium payments until the earliest of:
- The third contract anniversary
- The date annuity payments begin
- The date lifetime withdrawal payments begin
We credit additional premium payments made during a contract year to your contract’s interim interest allocation until the following contract anniversary. At that time, an additional premium applied to your accumulation value will be allocated based on your index and fixed interest allocations.
After the contract anniversary following your most recent premium payment, you can take up to 10% of your contract’s paid premium each contract year in one or more withdrawals free of surrender charges and penalties.
If the interest rate for an indexed allocation is positive at the end of any year, we will credit indexed interest and the interest bonus to your contract for any free withdrawals you took from that index allocation earlier that year.
The amount of interest will reflect the proportion of the contract year that your free withdrawal remained in the indexed allocations.
If, within the same contract year of a free withdrawal, you fully surrender your contract or add premium, we will retroactively recalculate the free withdrawal as if it were a partial surrender.
Surrendering your contract may result in a full or partial loss of any interest bonus credited to your contract, as well as a full or partial loss of interest and a partial loss of principal.
Take a larger withdrawal (partial surrender).
Within your contract’s first 10 years, if you take out more than 10% of your contract’s paid premium in a contract year, we’ll apply a partial surrender charge to the amount above 10% (the excess partial withdrawal).
The partial surrender charge is a proportion of the full surrender charge.
Required minimum distributions
Required minimum distributions from your Allianz annuity that is held within a tax-qualified plan (IRA, SEP, etc.) will qualify as free withdrawals if you take them annually in December, or monthly throughout the year.
Contract values and the amount available for free withdrawals at any time throughout the year will be reduced by the amount of the distribution(s).
Please keep in mind that purchasing an annuity within a retirement plan that provides tax deferral under sections of the Internal Revenue Code results in no additional tax benefit.
An annuity should be used to fund a qualified plan based upon the annuity’s features other than tax deferral.
Please consider all annuity features, risks, limitations, and costs before purchasing an annuity within a tax-qualified retirement plan.
The money you take out may be taxable.
Your contract values grow tax-deferred.
However, any money you take from your contract, including free withdrawals, other partial withdrawals, and required minimum distributions, may be taxable as ordinary income.
Because annuities are meant for long-term purposes, if you are under age 59½ when you take a distribution, it may be subject to a 10% federal additional tax.
Is Allianz 360 right for you?
If you’re concerned about saving enough for retirement – and if you want to have lifetime income withdrawals with an opportunity for payment increases – Allianz 360 with the 360 Benefit may be right for you.
Allianz 360 with the 360 Benefit can be a valuable part of your overall retirement strategy by:
- Offering an interest bonus equal to 25% of any interest that is credited to your contract each year before income payments begin,
- Increasing your income withdrawal percentages with every year you accumulate after age 40,
- Giving you several income options – including income withdrawals for life with the potential for increasing income, and
- Protecting your principal and providing the opportunity for it to grow tax-deferred.