What will we be covering in this annuity review?
In this review, we will be going over the following details regarding the SPDA 2000 1 Year Guarantee annuity from Ameritas:
- Type of annuity
- How it works
- Pros and cons
- Fees and penalties
- Where it works well
- Where it may not fit
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
The Ameritas SPDA (Single Premium Deferred Annuity) 2000 1-Year Guarantee annuity provides many nice benefits that retirees and pre-retirees today could be looking for, such as the protection of principal, along with the guarantee of an ongoing income for life.
A lot of these benefits are actually built directly into the annuity product itself. Along with a few other tax-related perks. So, in some ways, fixed annuities can be worry-free, even in a down market like we saw in 2008, and more recently in 2020 with the COVID-19 pandemic and corresponding market drop.
But, before you move forward with the purchase of this, or any, annuity, it is important to have a good understanding of how the annuity works, as well as how it can fit into your overall financial situation.
Fixed annuities have been getting more popular today as a way to ensure that people have guaranteed lifetime income throughout retirement. This is largely due to the fact that employer-sponsored defined benefit pensions from employers (the ones where the employer takes the risk, not the retired employee) are quickly disappearing.
Having an annuity can make it easy for investors to just roll funds over from an IRA or a 401(k) plan and continue letting them grow, while at the same time setting them up for eventual ongoing income in the future.
But, while having this in place can certainly be reassuring, it is also essential to know that owning an annuity will be a long-term financial commitment that can often come with a long surrender period – in some cases, 10 or more years. This means that after making the decision to purchase an annuity, it can be extremely difficult to change your mind about it without incurring a large penalty in order to get out.
Just like most other “big ticket” purchases, like a car, a home, or even a new laptop, doing a bit of annuity research up-front can save a great deal of headache down the road. In fact, even if a fixed annuity is something that will work well in your portfolio, all fixed annuities are not exactly alike.
There is a great deal of small print that is associated with them – even with the fixed annuities, which typically offer the least amount of “moving parts.” Even more so than the annuity products themselves, what can often add the most amount of confusion has less to do with the actual vehicle and more to do with the way in which they are sold to consumers by financial professionals. So, discussing your potential options with an annuity specialist can be helpful.
This is where we come in.
Annuity and Retirement Income Planning Information That You Can Trust
If this is your first visit to our website, we would personally like to welcome you to AnnuityGator.com. We are a team of experienced financial professionals who are dedicated to offering you the most comprehensive, as well as non-biased, annuity reviews that can be found anywhere on the Internet. We have also been providing such reviews for longer than any of our competitors.
For anyone who has been looking for information on annuities – or even if you have simply heard people talking about these products – it is likely that you may have encountered some conflicting details about them. This is not uncommon, as there is a lot of confusing information about annuities out there. In addition, even some reputable websites that are focused on marketing their annuities do a very good job of getting your attention, with the primary purpose of simply obtaining your contact information. They do this by making claims like the following:
- Highest Payouts
- Guaranteed Lifetime Income
- Lowest Fees
- Top-Rated A+ Companies
- Get Your Quote Now!
While these may certainly sound great – are any of these claims really true? If you want to find out, then you have come to the right place – and dare we say, it is likely the only place – where you can actually find out if that is so.
The insurance agents who offer fixed annuities will typically do their best in order to paint a rosy picture of how safe and secure these products are. But, what they neglect to tell you is that there are still a few drawbacks to owning this type of financial vehicle – and this means that you need to be aware of all of the potential angles prior to plunking down your hard-earned retirement funds.
This isn’t to say that what these agents are trying to sell you is bad. But it does mean that as you get closer to your retirement years – and as you are considering just exactly what you will do with your retirement savings – it is essential that you know what you are buying with these funds, and why you are buying it. This annuity review is here to help you with decoding all of the “fine print” so that you will have a better understanding of whether this annuity may be able to help you with achieving your financial goals in retirement.
So, if you are ready to begin, let’s dive in!
The Ameritas Life SPDA 2000 1-Year Guarantee Annuity at a Glance
|Product Name||SPDA 2000 1-Year Guarantee|
|Type of Product||Single Premium Deferred Annuity (SPDA)|
|Phone Number||(800) 745-7335|
Opening Thoughts About the Ameritas Life SPDA 1-Year Guarantee Annuity
Ameritas offers insurance, financial services, and employee benefits. The company currently has more than 4 million customers – which consist of individuals, families, and businesses. As of year-end 2019, the company held more than $37 billion in total assets under management – an increase of nearly $5 billion over the prior year.
With roughly 4 million customers, Ameritas has more than $99 billion of life insurance in force. The company is considered to be strong and stable, and has earned high ratings, including an A+ from Standard & Poor’s, and an A from A.M. Best Company.
The demand for annuities – which are always backed by insurance companies – has been increasing since market volatility has become the norm in today’s global economy. The fear of running out of money is what has many of today’s retirees seeking a safe place to put their savings, where it can earn at least some amount of return, while at the same time being protected. A fixed annuity can offer those things.
The problem is, though, that due also to the historically low-interest rates that have been present for so many years now (and that are likely to continue for a while), the return that fixed annuities have been offering is extremely low.
In fact, in most cases, it isn’t even enough to outpace inflation. This can not only be disappointing, but can also be dangerous if you are counting on this financial vehicle for your ongoing living expenses for the next 10, 20, or 30+ years in the future. The good news is that you still have some options if you’re seeking growth, safety, and an income that you cannot outlive in retirement.
Before we get into the gritty details, here are some legal disclosures…
This is an independent product review, not a recommendation to buy or sell an annuity. Ameritas has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be right for you, click here to obtain our free annuity report.
How Ameritas Describes the SPDA 2000 1-Year Guarantee Annuity
Ameritas describes the SPDA 2000 annuity as a Single Premium Deferred Annuity that provides tax-deferred growth, as well as principal guarantee, flexible access to the contract value, and potential income for life.
That appears to cover a lot of bases!
But hold on, because often when something appears to be “too good to be true,” it usually is.
As with other deferred annuities, the money that is in the account is allowed to grow and compound on a tax-deferred basis. This means that there is no tax due on the gain until the time of withdrawal.
The customer brochure for the SPDA 2000 Single Premium Deferred Annuity from Ameritas goes on to say that you’ll have “flexible access” to your money (although during the first seven years, you’ll be hit with a surrender charge if you withdraw more than 10% of the contract’s value in any of those years).
The SPDA 2000 1-Year Guarantee provides you with a locked-in interest rate for the first year. After that, the annuity will renew, based on the then-current rates. (There is also a 3-year and a 6-year option with the SPDA 2000 annuity. So, if you want to lock in a rate for a longer period of time, you could go that route).
You can actually get a higher rate, the more money you contribute. For instance, your rate may be bumped up if you contribute up to $99,000, $499,999, or over $500,000. In any case, there is a guaranteed minimum interest rate of 1%, below which the rate won’t fall.
There are also a few other features of note on the Ameritas SPDA 2000 annuity, such as a(n):
- Terminal illness/confinement benefit. This provides penalty-free access to your money if you are diagnosed with a terminal illness, or if you are confined to a nursing home for a certain period of time.
- “Bailout” endorsement. If you choose to go with this optional feature, you may be able to cancel the annuity at any time without incurring a surrender charge. (Although, depending on what state you’re in, you will have either a 20-day or a 30-day “free look” period whereby you can cancel the annuity without penalty during that window of time).
To take a look at the consumer brochure for the Ameritas Life SPDA 2000 annuity, go here.
How an Insurance or Financial Advisor May Present the SPDA 2000 Annuity to You
As an educated consumer who has been studying annuities, you have likely noticed that insurance and financial companies do a very good job of making their products sound like they can solve just about any possible need.
For instance, you may have read over the various features listed above and thought that this annuity would be perfect for your retirement savings and income purposes. And, if you are making the decision to purchase this annuity under the guidance of an insurance salesperson (who may stand to earn a nice commission or fee from the sale of it), then you will likely hear about it in terms of all of its key positives highlighted.
For instance, it is likely that you will hear these individuals discussing the following concepts about the Ameritas SPDA 2000:
- Locked-in interest rate (for a set period of time)
- Principal protection in any type of stock market environment
- Guaranteed income – for a certain period of time, or even for the remainder of your lifetime
But as far as these features go, you can get them on just about any other fixed annuity in the marketplace. So, what makes this particular one stand out?
We aren’t quite sure.
It may or may not actually gel with your specific financial goals and objectives. It can help, though, if you first read over our Annuity Buyer’s Guide, which you can find here.
What About Fees on the Ameritas Life SPDA 2000 1-Year Guarantee Annuity
It is also important to be aware of the fees that you may be charged when you initially purchase a fixed annuity, as well as the ongoing fees and expenses that you may be subject to throughout the years.
In this case, there is no up-front commission charged when you purchase the SPDA 2000 annuity from Ameritas. But, if you opt to withdraw more than 10% of the annuity’s contract value in any of the first seven years, you can be hit with a surrender charge.
Ameritas Life SPDA 2000 Annuity Surrender Charge Schedule
|Surrender Charge %||7||6||5||4||3||2||0|
On top of that, you could owe tax on any of the money withdrawn that is considered to be a gain. And, the IRS could also get their hands on 10% of your money in the form of an “early withdrawal” penalty you make your withdrawal(s) before you have turned age 59 ½.
The Annuity Gator’s End Take on the Ameritas SPDA 2000 1-Year Guarantee Annuity
Where it works best:
This annuity will typically work the best for those who are seeking:
- Safety of principal
- Guaranteed rate protection (for short periods of time)
- Additional protection if they need extended care or are diagnosed with a terminal illness
- Guaranteed lifetime income in retirement
Where it works worst:
- For people who need access to their money right away (during the 7-year surrender charge)
- For people who are seeking a high rate of return on their money
- For people who have a high-risk tolerance
- For people who are not looking for guaranteed lifetime income
In order to really know how to compare the best annuity for you and your specific needs, click here to download our free report on annuities.
Overall, it is always important to keep in mind that annuities should be considered as long-term financial vehicles, and because of that, they should appeal more to those who need retirement income in the future, and who are working to build up as much as they possibly can in the account in order to generate a nice amount of income when that time comes.
Unfortunately, even though the SPDA 2000 annuity from Ameritas does offer some nice features, it still falls a little short – and there may be some better alternatives available if you are seeking the opportunity for growth, as well as added guaranteed lifetime income in retirement.
If you are wondering, then, if this annuity is the right one for you, or if you have any questions and you need some additional help with getting pointed in the right direction, then just reach out to us through our secure contact form here.
Have Any Questions on the Ameritas SPDA 2000 Annuity? Did You See Any Mistakes in this Annuity Review?
We appreciate you bearing with us on this annuity review. If you found it to be helpful, then please feel free to spread the word and share it with others because they, too, may find the information to be helpful.
One final note – as humans sometimes do, we can make mistakes. So, if you did happen to notice any while going through this review, please do let us know. We are always more than happy to make any necessary corrections and to give credit where credit is due.
That being said, if you are an investor and this review causes you any confusion and/or it creates any additional questions, then please reach out to us as well. While we are not always able to get back to you right away, we can usually clear up any questions within just a day or two.
Is there any other Annuity that You Would Like to See Reviewed?
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The Annuity Gator
P.S. If you would like to read more of our Ameritas annuity reviews here are some links to check out:
- Independent Review of Ameritas
- Independent Review of the Ameritas No-Load Variable Annuity
- Independent Review of the Ameritas Compass Index Annuity
- Independent Review of the Ameritas Accumulation 7 Index Annuity.