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Allianz Annuities Review

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Allianz Life Insurance Company has its hands in many different sects of the retirement sphere, including annuities. The company originated in Berlin in 1890 but has grown to a worldwide enterprise since then, with offerings in more than 50 nations around the globe. In the U.S., its life insurance and annuity business is centrally located in Minneapolis, Minnesota.

Annuity Fees Annuity Type Minimum Initial Premium More Information
Allianz 222® Annuity Find an Advisor

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  • No annual fees
Fixed indexed annuity $20,000

Annuity Type

Fixed indexed annuity

Minimum Initial Premium

$20,000
Core Income 7® Annuity Find an Advisor

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  • No annual fees
  • 1.25% rider charge
Fixed indexed annuity $10,000

Annuity Type

Fixed indexed annuity

Minimum Initial Premium

$10,000
Allianz Index Advantage® Variable Annuity Find an Advisor

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  • 1.25% annual product fee
  • 0.64% - 0.72% variable option annual fee
  • 0.20% death benefit rider fee
Index variable annuity $10,000

Annuity Type

Index variable annuity

Minimum Initial Premium

$10,000
Allianz Accumulation Advantage Find an Advisor

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  • No annual fees
Fixed indexed annuity $20,000

Annuity Type

Fixed indexed annuity

Minimum Initial Premium

$20,000

Many prospective customers may find it hard to trust an annuity firm, but the industry has put in place guidelines to evaluate these companies. Standard and Poor’s (S&P), Moody’s and A.M. Best are three such authorities, and each member of the trio has rated Allianz within the top 25% of their rankings.

Allianz 222® Annuity

The Allianz 222® Annuity is a fixed indexed annuity that offers tax-deferred growth and a maximum issue age of 80. This is great for those interested in saving for retirement as it allows as much appreciation as possible before income taxes are taken out upon withdrawals. Other than this, the main draw of this contract is a set of two bonuses: one you can earn during your retirement saving phase and another once you begin receiving payments.

These are attributed to your account’s protected income value (PIC), which can only be earned once you’ve been a contract holder for longer than 10 years. The first bonus affords customers a 15% boost to any premium payments that are made within the opening 18 months of the contract’s life. On the other hand, the second could provide even more financial gain with a 50% bonus on any interest your indexed assets earn.

For a fixed indexed annuity, the types of indexes and styles of asset allocations that customers are offered is integral to how beneficial it can be in the long run. For this contract, there are four main options that include the S&P 500® Index, the Nasdaq-100® Index, the Russell 2000® Index and other notable choices.

Fees

Like most fixed indexed annuities, the Allianz 222® Annuity has essentially no fees. However, there is a 10-year window when any withdrawals past the 10% fee-free amount are accompanied by excess charges. Every year after the first three years, these fees will decline. They open at 10%, and starting the fourth year onward, move to 8.75%, 7.50%, 6.25%, 5.00%, 3.75%, 2.50% and 1.25%. Once you reach the 11th anniversary of your contract, you’ll be able to make any size withdrawal for free.

Unfortunately for most annuitants, a federal income tax is unavoidable when it comes to annuity distributions. To avoid higher charges you can wait until you are older than 59.5 to begin taking withdrawals from your account. If you cannot wait for that time to come, the IRS may impose a 10% tax hike on any money you take out.

Realistic Return Expectations

As things currently stand with this annuity, its fixed interest rate is 1.10%. When it comes to your PIV bonus and interest bonus, respectively, it offers 15% and 50% rates. You can only count on these percentages for a year at a time though, as Allianz reserves the right to alter them on an annual basis. The indexed returns are largely unpredictable, as they depend on market performance.

Core Income 7® Annuity

The Core Income 7® Annuity takes aim at altering the options individuals receive when it comes to income withdrawals and how they’re paid out. The Core Income Benefit rider is the most noteworthy perk of this policy, though it still provides tax-deference, a death benefit so your contract is paid to your beneficiaries and the ability to invest in market indices through Allianz. There is a max issue age of 80 for this annuity, and a minimum initial premium of $10,000.

Account holders begin receiving annual increases in the size of their income withdrawal percentages once they reach age 45. So the longer you wait to begin taking annuity payments, the more Allianz will reward you and your income. You can, however, be no younger than 50 years old to start withdrawals.

When the time comes, your money can be paid to you in two distinctly different styles, courtesy of the aforementioned Core Income Benefit rider. For those that feel they’d rather have consistent payments in retirement, “Payout option 1” is the better choice. But “Payout option 2” has more upside if you’re comfortable with smaller distributions early on, followed by the opportunity to increase them annually.

Fees

Typically riders are optional, but the Core Income 7® Annuity comes automatically paired with the Core Income Benefit rider. That means that its corresponding 1.25% annual fee is mandatory.

This annuity charges extra fees for early withdrawals past the 10% fee-free amount. For this particular account, these will stick around for the first seven years of your contract’s life, though the fee will decrease annually. These rates go as follows: 8.5%, 8%, 7%, 6%, 5%, 4% and 3%. After this period passes, all withdrawals can be made fee-free.

The IRS may add a 10% surcharge onto your existing income taxes if you make any withdrawals prior to turning 59.5 years old. So if you’re not concerned about Allianz’ withdrawal charges, at least try to avoid this.

Realistic Return Expectations

The interest rates associated with this annuity are solid, as Allianz currently provides a 2.50% rate to all new account holders. Unfortunately, these rates are only locked in for a year at a time, as a new one is declared on every one of your contract anniversaries.

When it comes to index-based earnings, you can invest in the Nasdaq-100® Index, the S&P 500® Index, the Russell 2000® Index or the Bloomberg US Dynamic Balance Index II. All four are reporting solid returns, on top of the fact that because your money is indexed, you won’t experience as much of a loss if there’s a downturn in the market.

Allianz Index Advantage® Variable Annuity

Index Advantage® Variable Annuity is unlike most of the other variable annuities at Allianz, although it maintains a maximum issue age of 80. Rather than solely building your portfolio with securities, indexes and investment strategies, you’ll be able to subscribe to a specific type of index strategy through the company. These have multiple variations, including options geared for performance-minded annuitants, as well as a protection-based strategy, along with others.

The “Index Performance Strategy” affords customers who achieve positive index returns an annual performance credit for their contract value, although this is capped. However, if you experience index losses, you are partially protected from losing money, up to a pre-specified buffer.

If you’re looking to take a chance on riskier investments, the “Index Guard Strategy” is probably best for you. Its positive index return policy is the same as the performance strategy above, but how it handles losses is drastically different. The guard strategy includes a 10% loss floor, meaning that your contract can only lose up to 10% in returns. 

The “Index Protection Strategy” is the most heavily sheltered of all, as anyone who selects this strategy is immune to negative index returns. You can’t get the best of both worlds though, so all positive returns are forcibly held to a prespecified limit called the Declared Protection Strategy Credit (DPSC). This applies even if the index performs above that mark, which could obviously be rather frustrating. The DPSC is given to you by Allianz when your contract goes into effect, although it can change.

Also available in the "Index Precision Strategy," which combines the benefits of the Protection and Performance strategies. In fact, it provides the same protection as the former and the same 10% buffer as the latter. It's designed to perform best in a low-growth market, as it offers a predetermined annual rate if the index's value stalemates or is positive.

Fees

There are two separate annual fees associated with the Allianz Index Advantage Variable Annuity: a 1.25% product fee and a 0.64% to 0.72% variable option fee. Should you annex the optional death benefit onto your contract, an additional 0.20% fee will join it.

Allianz institutes a number of stipulations when it comes to withdrawing funds early from your account. First off, you are allowed 10% in free withdrawals each year, so long as each payment is $100 or more and the value of your contract remains higher than $2,000. Any annuitant that ventures beyond that initial 10%, though, will be subject to withdrawal charges of 8.5%, 8%, 7%, 6%, 5% or 4%. Rates drop every year your account is active, and after six years, the fees disappear.

Because an annuity is a type of retirement fund, you should not start taking distributions from it until you’ve reached 59.5years old. Breaking this rule could be expensive, as the IRS has the option to tack on a 10% income tax hike.

Realistic Return Expectations

With this annuity, there are many different indexes available, including the S&P 500, the Russell 2000 Index, the Nasdaq 100 and more. However, because these indexes rely on market performance, returns are hard to determine.

Allianz Accumulation Advantage

The Allianz Accumulation Advantage contract is a fixed indexed annuity that requires a $20,000 minimum initial premium. The contract can be opened by anyone 80 years old or younger. There are two rate bands for the fixed rate attached to this account: above $100,000 and below $100,000. For the indexed side of things, you'll have access to a handful of options from leading management companies like PIMCO, BlackRock and Bloomberg, as well as the S&P 500.

The death benefit associated with this annuity is equal to the greater of your contract's accumulation value or guaranteed minimum value. Your beneficiaries can be paid either as a lump sum or as an annuity of at least five years.

Fees

This contract has no annual fee associated with it. When it comes to withdrawals, you can withdraw up to 10% of your contract value annually. Beyond that amount are annual fees that decline every year, starting at 9.30% in year one.

If you make a withdrawal before age 59.5, you'll be subject to a 10% income surtax, courtesy of the IRS. This is in addition to standard income taxes.

Realistic Return Expectations

Indexed returns rely on market performance, so there's really no way to project what kinds of returns that part of your contract could garner. On the other hand, your fixed rate will be 0.75% if your premium is less than $100,000 or 0.85% if your premium is $100,000 or more.

Tips for Choosing an Annuity

  • Consulting a retirement-minded financial advisor can be a great way to both learn about annuities and maybe have a professional take a deeper look at some of the options that you think fit your plans. SmartAsset's free tool can match you with up to three advisors in your area. Get started now.
  • Retirement is an extremely complicated venture to save for, and annuities can be a welcome addition to anyone’s plan. There are many different styles of annuities, though, so intensive research is incredibly key to selecting the one you want to invest in. In other words, as soon as you think you’ve found the annuity for you, look around some more.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Least
Most
Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset