What Will Be Covered in this Annuity Review?
In this annuity review about the RiverSource Life Rate Bonus 1 MYGA annuity, we will be going over the following information about this product:
- Product type
- Fees
- Current rates
- Realistic long-term return expectations
- How this annuity is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
For those who have been thinking about purchasing a fixed annuity because you want to know that your principal will be safe and that you will also obtain a guaranteed lifetime income in retirement, RiverSource Life Rate Bonus 1 MYGA annuity could be a good choice for you.
One of the key reasons for this is because the Rate Bonus 1 can offer you an interest rate guarantee, as well as a guaranteed stream of income in the future – which in turn, can help to rid you of the worry about running out of incoming cash flow in retirement.
But, as enticing as these benefits might sound, you really shouldn’t go out and purchase this – or any – annuity unless or until you have an in-depth understanding of just exactly how the product works, and how it may or may not work for you.
Throughout the past decade or so, due in large part to the constant ups and downs of the stock market, fixed annuities have become quite popular. This is especially the case for those who are retired, or who are in the process of preparing for that time in their lives. With their income guarantees, as well as the fact that your principal is kept safe, fixed annuities may seem to be the best of all worlds for investors.
But, just like with any other type of annuity, you need to proceed with caution. For example, the RiverSource Life Rate Bonus 1 annuity is a product that has some moving parts, and along with this can come pages of small print that you really need to familiarize yourself with before committing a substantial chunk of your retirement savings to it.
Helping you to better understand this information – without feeling like you’re lost in a maze of jargon – is where the Annuity Gator comes in!
If you’ve spent any amount of time searching for information about annuities online, it is likely that you have also run across some highly conflicting details about these products. This, however, is not all that surprising, as there are many, many annuities out there in the market, and everyone seems to have differing opinions about them.
In addition to just simply reading up on annuities, it is possible that you have also recently attended a seminar about this product where, in return for a free lunch or dinner, the seminar presenter provided you with more detail about the RiverSource Life Rate Bonus 1 annuity or some other similar product. Your attendance at this event could even be the catalyst that has ultimately led you here to our website.
In your quest for annuity information online, you may also have come across some of the other sites that discuss annuities online. While these may initially seem informative, many of these websites are actually just trying to lure people in – in order to collect your contact information – by making some pretty bold claims, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Sound familiar?
As great as these claims may be, though, it is all the more important for you to verify whether or not they are actually valid before moving forward with the purchase of an annuity – just as you would likely do prior to buying any other type of high-dollar product or service.
If you are seeking more details regarding the RiverSource Life Rate Bonus 1 MYGA annuity, you are definitely in the right place. In fact, we dare say that this website is the only place online where you will obtain all of the key information that you will require for making a well-informed buying decision (or alternatively, for making the decision to forgo this annuity and move on to something else that better suits your needs).
As you read through this annuity review, you will find that we don’t just lay out the nice, rosy advantages of the product, but we also give you details about what could be considered some serious drawbacks, too. We don’t do this to scare you, but rather to give you the whole picture, as we firmly believe that knowing everything is the only way to make a truly informed financial related decision.
With that in mind, we also want to be clear in that we fully believe that an annuity can be a great financial vehicle for some people – provided that it fits in well with your short- and long-term financial goals.
So, with that being said, if you’re ready to proceed, then let’s go ahead and get started!
The RiverSource Life Rate Bonus 1 MYGA Annuity at a Glance
| Product Name | Rate Bonus 1 |
|---|---|
| Issuer | RiverSource Life Insurance Company |
| Type of Product | MYGA (Multi-Year Guarantee) / Fixed Annuity |
| S&P Rating | AA- (Very Strong) |
| Phone Number | (800) 333-3437 |
| Website | https://www.riversource.com/ |
Opening Thoughts on the RiverSource Life Rate Bonus 1 MYGA Annuity
The beginnings of RiverSource Life Insurance Company stem back to the late 1800s when 24-year-old John Tappan founded Investors Syndicate in 1894. The company has withstood the test of time, as well as numerous financial crises in the United States.
Today, RiverSource offers a nice selection of life insurance and annuities. Its annuity offerings include fixed and variable, as well as immediate annuities whereby a set amount of income can start being received right away (or very soon after an individual makes a deposit).
RiverSource has attained high ratings from the insurer rating agencies, including a(n):
- A+ (Superior) from A.M. Best
- AA- (Very Strong) from Standard & Poor’s
- Aa3 (Excellent) from Moody’s Investor Service
The company has also achieved a Comdex Ranking of 95 (out of a possible 100). (The Comdex ranking is an average percentile of a company’s ratings, which ultimately makes it easier to compare companies).
The RiverSource Rate Bonus 1 annuity provides several guarantees that are built right into the contract. Because it is a fixed annuity product, you can rest assured that your principal will be safe, no matter what occurs in the market over time.
Throughout the past several years, fixed annuities have grown in popularity, especially for those who have a goal of keeping their principal safe from market fluctuations, as well as those who want to know that they can count on an income for the remainder of their lives.
But, even though these features and guarantees might initially sound ideal, the truth is that if something sounds too good to be true, it just might be. So, given that, it is important that you gather as many of the details as you possibly can before you move forward with purchasing this, or any other, fixed annuity.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. RiverSource Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment 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 situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, to obtain our free annuity report.
How RiverSource Describes the Rate Bonus 1 MYGA Annuity Product
RiverSource Life describes the Rate Bonus annuity as a single premium fixed annuity that offers rate and timeline options that can benefit you in both your accumulation and your retirement years.
With the Rate Bonus 1 annuity option, a minimum of $2,000 can be deposited initially. This product offers you an initial base rate guaranteed period of five full years, and you could be eligible for a bonus interest rate (currently at 1%), credited in the first year.
If you want to check out the rates (as of October 23, 2017), you can take a peek HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
With many investors today still shying away from the volatile stock market (particularly those who are approaching retirement), it is likely that if you’ve been presented this particular annuity by a financial or insurance advisor, he or she keyed in on the guaranteed features.
Given that, you can be assured that your money will be safe from choppy market conditions. However, even with the nice, safe element that surrounds this annuity, it is possible that your money could still quite frankly be at risk in other ways.
For instance, because of the low-interest rate environment that we have been in for roughly a decade now, it is likely that the rate of guaranteed interest you receive may not be enough to beat – or even to meet – future inflation. This being the case, you could end up losing purchasing power in the future, when you need to rely on your investment income the most.
It is important to be careful, especially if you are being presented this – or any – annuity by an advisor who will earn a commission on the sale. That’s because they may lean much more towards presenting you with all of the rosy, positive features, yet leave out the features that may be considered as drawbacks.
So, unless you are completely convinced that the RiverSource Life Rate Bonus 1 MYGA annuity product is the one for you, please feel free to reach out to us with any additional questions that you may have.
Are There Any Fees for this Product?
In addition to the painfully low-interest rate that you are likely to receive with the RiverSource Life Rate Bonus 1 MYGA annuity, you could also be hindered from withdrawing funds from this product during the surrender period.
In this case, the Rate Bonus 1 has six full years of surrender charges. This means that if you were to withdraw more than 10% of your contract value during this time period, you would be hit with a surrender fee. These fees start at 9%, and then gradually grade down from there as follows:
| Contract Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Surrender Charge % | 12 | 11 | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 2 | 0 |
On top of that, if you make such withdrawals before you have reached the age of 59 1/2, then you will also likely incur an additional 10% early withdrawal penalty from the IRS.
The Annuity Gator’s End Take on the RiverSource Life Rate Bonus 1 MYGA Annuity
Where it works best:
This particular annuity will usually work the best for those who are looking for:
- Principal protection
- A guaranteed rate of interest (at least for a set period of time – in this case, for the first five years)
- Guaranteed lifetime income in the future
Where it works worst:
Alternatively, this annuity may not fare so well for those who:
- Want the opportunity for a higher rate of return on their money
- Want to access more than just 10% of the contract value within the first six full years (in most states)
- Do not plan on using the lifetime income feature
In Summary
There are many important concerns to keep in mind when you are saving for retirement. For instance, you want to be sure that your funds are earning a nice return, but that they are also safe from potential market downturns. It is also essential to know that you will have a reliable stream of income in retirement – regardless of how long you may need it.
If you are still thinking about moving forward with purchasing the RiverSource Life Rate Bonus 1 annuity, you can be sure that your principal will be safe from market fluctuations, and that you will also have a reliable stream of income in retirement.
But even with the guarantees on this product, the reality is that it could still fall somewhat short for you – particularly if you are seeking the opportunity for better growth – so quite honestly, there may very well be a better alternative out there for you.
The only way to really know how this annuity may perform based on your specific situation is to have it tested. We can do this for you by running the numbers through our annuity calculator, and we can then provide you with a spreadsheet of the results. In order to receive this information, just simply contact us through our secure online form here and let us know.
Have Any Additional Questions? Notice Any Mistakes in this Review?
We realize that this annuity review was a tad bit lengthy. However, our feeling is that we would much rather “err” on the side of offering “too much” information than not enough. So, we do appreciate you sticking with us thus far.
If you found that this annuity review was helpful, then please feel free to forward it on to anyone else who you think might also benefit from it. Also, we realize that not everyone’s financial situation is the same. So, if you do still have any more questions about the RiverSource Life Rate Bonus 1 MYGA annuity, please reach out to us here and we’ll be glad to assist you further.
Are there any other annuities you would like to see us review?
If so, we will get on it!
There are many annuities available on the market today. So, if you don’t see an annuity in our database that you would like to know more about, then just simply let us know the name of that annuity (or annuities, if there is more than one), and our team of annuity “geeks” will get to work on it!
Best,
The Annuity Gator
