What will we be discussing in this annuity review?
In this review of the RiverSource Protected Advantage 6 Year annuity, we will be talking about the following information:
- Type of annuity
- How it works
- Pros and cons
- How it may be presented by an annuity salesperson
- Where it may work well
- Who may not want to purchase this annuity
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
The purchase of an annuity can be a big decision. After all, these financial vehicles – if they are purchased properly – can help to ensure that you will have an income for the rest of your life, no matter how long you need it. Today, many people are living much longer than in the past, so knowing that you have ongoing income can be a big relief.
With deferred annuities – the ones that are not converted over to an income stream right away – can also provide you with tax-deferred growth. So, you can essentially earn interest on your contribution(s), as well as interest on prior interest, and interest on the gains that would otherwise have been taxable.
Buying an annuity today can be almost like purchasing a car in that they all offer various features, including possibly a death benefit, as well as penalty-free access to your funds in case you are diagnosed with a terminal illness, need long-term care, and/or become disabled or unemployed.
But even though annuities can offer a long list of benefits, there can also be some pitfalls in the products themselves, as well as the way they are sold. Annuities are confusing products, so unless you really read the “fine print”, an annuity may not perform the way that you expected it to.
On top of that, these products can also sometimes be mis-sold by insurance and financial advisors. This doesn’t necessarily happen on purpose, but because advisors who don’t have a focus on annuities may not fully understand them either.
So, it can be extremely beneficial to take a look at an annuity that you’re considering with an independent annuity “guide” so you can be more assured that you’re getting into the right product (or avoiding one that really won’t fit your needs).
This is where Annuity Gator comes in.
Annuity and Retirement Income Planning Information You Can Trust
If this is your first visit to our website, please allow us to officially welcome you here to Annuity Gator. We are a team of experienced annuity experts who focus on offering comprehensive and unbiased annuity reviews online.
We have been at this for quite some time now – far longer than our competitors. Because of this, we have come to be known as a highly trusted source of annuity information online. One of the ways we can help is through our in-depth annuity reviews, which can be easily accessed on our website here.
Over the past several years or so, though, a number of “copycat” websites have started to spring up, mimicking what we do. But, while that can be somewhat confusing for consumers, we take it as “imitation being the highest form of flattery.”
While you’ve been researching annuities online, you may have come across some conflicting details about these products. This really isn’t too surprising to us, because there are many opinions about them – some good, some not so good.
This is yet another reason why it is so important to really get a handle on how annuities work – ideally from someone who isn’t trying to sell you a particular annuity – so that you can decide for yourself whether or not an annuity will fit in with your short- and long-term financial goals.
If you would like to know more about the RiverSource Protected Advantage 6-year annuity, you are definitely in the right place. In fact, dare we say that our website is the only place on the Internet where you will get all of the important details that you need for making a well-informed decision.
One reason for this is because we aren’t going to paint a rosy picture for you and focus on only the good stuff. Rather, we provide the whole picture – good, bad, and yes even the ugly. But this can help you in determining whether or not this fixed MYGA (Multi-year Guarantee) annuity is right for you.
In order to be perfectly clear, we want to state for the record that we believe annuities can be a great addition to your portfolio. But that is only provided that you’re purchasing the annuity for the right reason(s).
So, if you’re ready to get started, let’s go!
The RiverSource Protected Advantage 6-Year Annuity at a Glance
|Product Name||Protected Advantage|
|Issuer||RiverSource Life Insurance Company|
|Type of Product||Fixed / MYGA (Multi-Year Guarantee Annuity)|
|A.M. Best Rating||A+ (Superior)|
|Phone Number||(800) 333-3437|
Opening Thoughts on the RiverSource Protected Advantage 6-Year 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 was ranked number one in client satisfaction among all annuity providers in 2019 by J.D. Power. Also for 2019, RiverSource attained various recognition and accolades, including being 6th in variable universal life insurance premiums (based on LIMRA’s U.S. Retail Individual Life Insurance Sales Report), 9th largest provider of variable annuity sales (also based on LIMRA’s U.S. Retail Individual Life Insurance Sales Report), and 10th in individual disability income sales (based on non-cancelable individual policies) per LIMRA International’s 1st quarter 2019 U.S. Individual Disability Income Sales.
The company also has high ratings from the insurer rating agencies, including a(n):
- Aa3 (Excellent) from Moody’s Investor Service
- A+ (Superior) from A.M. Best
- AA- from Standard & Poor’s
- 95 (out of 100) by Comdex
Throughout the past several years, fixed annuities – including MYGAs – 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 our 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, click here to obtain our free annuity report.
How RiverSource Describes the Protected Advantage Annuity
RiverSource Life describes the Protected Advantage annuity as a single premium product that offers rate and timeline options that can benefit you in both your accumulation and your retirement years.
There are actually three different Protected Advantage annuity options to choose from. In addition to the 6-year annuity, there is also an 8-year and a 10-year. While the fixed rate period is five years on all of these options, the rate can vary, typically being higher with the longer surrender periods.
As with other annuities, you can “annuitize,” (convert over to an income stream) the 6-year Protected Advantage annuity and receive an income stream for a set period of time, or even for the remainder of your lifetime.
You can check out more info about this annuity by going to the RiverSource website here.
There is also more information regarding the RiverSource Protected Advantage annuity rates for the 6-year, 8-year, and 10-year options located here.
How an Insurance or Financial Salesperson Might Present this Annuity to You
If you are approaching retirement, you may be torn between going with financial vehicles that have more risk in order to increase your opportunity for growth, or going with something “safe” so that you don’t lose any of your hard-earned retirement funds.
Because many pre-retirees today are concerned about not losing what they’ve already saved, having certain guarantees can be comforting – so if you have been presented this annuity by an insurance or financial advisor, it is likely that they keyed in on the safety features of this product, along with the ability to earn a guaranteed interest rate for a set period of time, no matter what happens with the stock market or interest rates in the economy.
But there are some tradeoffs that you need to be mindful of. For example, even though you can sleep better at night knowing that if interest rates fall or the stock market tanks, the reality is that you still may not be able to beat, or even meet, the rate of inflation with the painfully low rate being offered on this annuity.
For example, at the time of this writing (mid-May 2020), even the highest interest rate on the Protected Advantage annuity from RiverSource – which you can obtain by contributing $25,000 or more and locking in for 5 years – is well below 1.5%.
In fact, because the U.S. has been in a historically low-interest rate period for quite some time now (ever since the 2008 recession), you could end up “trapping” a large portion of your money for a long period of time – which in turn means that you could be giving up the ability to take advantage of other financial opportunities that could provide you with a better rate.
Also, while insurance companies love to tell you that their products – including annuities – are “liquid,” the reality is that you can face a penalty (in some cases, a pretty hefty one) for taking out your money “early.”
For instance, with the Protected Advantage annuity, you can access up to 10% of the contract’s value without having to pay a withdrawal fee. But, if you cancel the contract altogether, or even withdraw more than the 10% free withdrawal in any given year, you could find that RiverSource will hang on to some of your money.
What About Fees on the RiverSource Protected Advantage Annuity(ies)
Even though annuities can offer you peace of mind, they can also come with various charges and fees. And, while fixed and fixed indexed annuities don’t typically charge the long list of fees that most variable annuities do, there are still some “gotcha’s” to look out for…starting with the surrender penalty.
The surrender charge on the Protected Advantage annuity will actually differ, based on the option that you choose. In this case, you can earn more with the 8-year and 10-year options, but you also need to keep your money locked up for a longer period of time.
RiverSource Protected Advantage Annuity Surrender Charge Schedule/Percentage
In addition, depending on when and how much you withdraw, you could also owe taxes on the money. And, if you make such withdrawals before you have turned age 59 ½, the IRS will also take a piece of the pie through an additional 10% early withdrawal charge.
With all of this in mind, you really need to be absolutely sure that the funds you contribute to this (or any) annuity won’t be needed in the near future for emergencies or other financial obligations.
The Annuity Gator’s End Take on the Protected Advantage Annuity from RiverSource
Where this annuity works best:
While the RiverSource Protected Advantage 6-Year annuity may not be right for everyone, it could be a good option for those who are seeking the following benefits:
- Guaranteed growth (at least for five years during the rate guarantee period)
- Protection of principal
- Lifetime income in retirement
Where it works the worst:
This annuity may not be right for you if:
- You want the opportunity to earn an even higher rate of return in order to keep better pace with future inflation
- You want to access more than just 10% of the contract’s value each year during the surrender period
- You do not plan to use the lifetime income feature
If you’ve been thinking about what to do with your savings for the future, there are a number of criteria that you should ideally consider. For example, with annuities, you’ll need to make sure that the product allows you the opportunity to earn a nice return (at least enough to meet or beat inflation), while also keeping your money safe. Likewise, if you are vying for a future income stream, you also need to know how the annuity will pay out when you need to convert the funds into ongoing income.
So, if you are still considering a purchase of the Protected Advantage 6-year annuity, then you can definitely rest assured that your money will be safe, no matter what goes on with the stock market. You can also count on an ongoing income stream down the road, alleviating the worry about running out of money before “running out of time.”
On the other hand, even though this annuity can provide you with a plethora of features, the reality is that this product could still fall a tad bit short, and quite honestly, there could be a better alternative out there for you. This is particularly the case if you have been looking for a way to keep your principal safe, yet still have the opportunity to earn a higher amount of return.
In any case, the only way to really know how this (or any) 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.
Do You Have Any Additional Questions? Any Other Annuities You’d Like to Have Reviewed?
While we know that this annuity review was a bit on the long side, we feel that providing “too much” information is far superior than not providing enough. That being said, we appreciate you sticking with us here to the end.
We also realize that, because everyone’s situation is different, there may have been some questions that went unanswered in this review. If this is the case and you still have any additional questions or concerns, please feel free to reach out to us here.
In addition, if you found this annuity review to be helpful, then please forward it on to anyone else that you think may benefit from it, as there is a lot of misconception out there about annuities and how they work.
Is there any other annuity you would like to see reviewed?
If so, we will get right on it!
There is a long, long list of annuities that are available today. So, if you would like to learn more about a certain product (or products, if more than just one), please let us know and we will be happy to add that review to our annuity database.
The Annuity Gator
P.S. If you would like to read more of our RiverSource Life annuity reviews here are some links to check out:
- Independent Review of the RiverSource Life Rate Bonus 1 MYGA Annuity
- Independent Review of the RiverSource Life Value Plus Bonus Annuity