America Equity’s Retirement Gold fixed index annuity is a flexible premium with a 10-year surrender charge period. The Retirement Gold annuity from American Equity allows you to withdraw your funds at any time, but you may incur surrender charges if you take withdrawals within the surrender charge period. The policy provides for penalty-free withdrawals (up to 10%) after the 1st contract year. This annuity contract provides various riders that increase the liquidity of your funds in the event you’re diagnosed with a terminal illness, or confined to a nursing home.
Income taxes
Like other deferred annuities, Retirement Gold from American Equity gives policyholders the opportunity to accumulate a significant sum of money by allowing their premium and interest to grow tax-deferred. Unlike with taxable investments, you don’t have to pay taxes with this arrangement until you start making withdrawals.
The retirement gold annuity earns interest on the premium, interest on your interest, and interest on what you’d usually pay in income taxes. Once you get to withdraw your earnings, they’ll be taxed as ordinary income.
Guaranteed income
This annuity product from American Equity has the potential to provide guaranteed income. You can choose from various income options, and opt to either receive payments over a number of years, or for life (regardless of how long you live).
Tax treatment
If you withdraw your funds before you hit the age of 59.5, you’ll be subjected to a 10% federal penalty. Normally, annuities grow tax deferred. However, any distribution could trigger a taxable event. American Equity recommends that you consult an independent tax professional if you want to figure out the applicable tax situation surrounding your annuity.
Issue ages
The policy is open to all annuitants up to age 78 years.
Minimum & maximum premiums
The minimum premium payable with this annuity product is $5,000.
Below are the applicable maximum premiums:
- 0-69 years – $1,500,000
- 70-74 years – $1,000,000
- 75-78 years – $750,000
Bonus
A guaranteed premium bonus of 8% is given for all premiums paid within the first contract year. Your accrued bonus amount is calculated as the portion of contract value resulting from the bonus, in addition to interest, minus withdrawal amounts. Surrender charges don’t apply to the policyholder’s accrued bonus amount.
Bonus vesting
The bonus vesting duration is 14 years. Each year after the third contact year, you become vested in a percentage of the bonus, till you become 100% vested at the end of the fourteenth contract year. The vested amounts of the bonus are the amounts that you do not forfeit as a result of an early partial withdrawal or surrender.
If you make partial or surrender withdrawals, the following bonus vesting schedule applies.
At partial withdrawals – the pro-rata portion of the partial withdrawal amount allocated to your accrued bonus amount multiplied by the bonus vesting %.
At surrender – your accrued bonus amount multiplied by the bonus vesting % minus the non-vested portion of any penalty-free withdrawals taken from your accrued bonus amount in the last 12 months.
Minimum guarantees
The minimum guaranteed interest rate (MGIR) is set at issue and lasts for the life of the annuity. American Equity guarantees that the MGIR will never be less than 1.0%.
Lifetime income benefit rider
This rider allows policyholders to take a guaranteed lifetime income from their annuity without losing control of their retirement assets. The availability of this rider might however vary by age.
Withdrawals
You can withdrawal funds from your contract value at any time. Withdrawals are either partial or penalty-free withdrawals.
- Penalty-free withdrawals – once each year, after the first Contact anniversary, you make a penalty-free withdrawal of up to 10% of the contract value.
- Partial withdrawals – partial withdrawals can be taken at any time. American Equity first determines the amount of the partial withdrawal that would be penalty-free. Any amounts above this are subjected to the surrender charges and the bonus vesting schedule.
