Because people are living so much longer today than ever before, a primary concern that is on the minds of retirees and those who are preparing for retirement is whether or not they will have enough income for the rest of their lifetime.
But according to Athene, with the Athene Ascent annuity’s income rider, “you can enjoy an income that lasts as long as your retirement does.” Because of this, you can be more assured that you can count on incoming cash flow that you literally cannot outlive.
In fact, there are numerous benefits for you if you opt for this income rider, especially if you are seeking some or all of the following benefits:
- Guaranteed Growth
- Guaranteed Income
- A variety of income payment options
- Principal protection
- A shield from required minimum distributions
- Continuation of income for your spouse when you pass away
To take a quick peek at the <Athene Ascent Income Rider brochure, you can go HERE.
But, before you go running to your nearest insurance agent and apply for the Athene Ascent annuity – and its optional income rider, it can be helpful to have a good understanding of just exactly how this income rider works.
This can ensure that you won’t have any unpleasant surprises – particularly down the road, when it may be much too late – or too expensive – to make any necessary changes to your annuity contract.
How the Athene Ascent Annuity Income Rider Works
When you initially purchase the Athene Ascent fixed indexed annuity, along with the income rider, there will be an accumulated value established for your annuity. Also, an income base will be set up for your rider.
This income base will accumulate, based on the income rider that you select. In this case, there are actually a couple of ways that you can work the income rider, depending on what you’re looking for in terms of performance and guarantees. For example, one of the options here will allow you to grow your income base at a guaranteed simple rate of interest.
Another alternative is to receive guaranteed growth, plus interest credits. In this case, you will have the opportunity to increase your future “paycheck” in the future, when any of the interest credits that are applied to the accumulated value are also applied to your income base.
(It is important to understand, though, that if you opt for the second option – guaranteed growth, plus the interest credits – your guaranteed simple interest rate will be lower than it is in the first option).
With that in mind, your income base may be determined based on the following calculation:
Your initial premium
+ Income Base Bonus
+ Simple Interest Credits
+ Indexed-Interest Credits (if applicable)
When the time comes to start taking income from your Athene Ascent annuity, there are several options that you may choose. These include:
- Earnings Indexed Income Option – This option will provide the opportunity for your lifetime income stream to grow. For example, each year, based on a percentage of your interest credits (if any) that are added to your accumulated value, income may rise. (This, however, will be in exchange for a lower initial income amount as compared to the level income option).
- Level Income Option – With the level income option, you can count on a regular and predictable income amount that is guaranteed to continue for the remainder of your lifetime – regardless of how long that may be.
- Inflation Adjusted Income Option – The inflation adjusted income alternative offers the potential to grow your income amount in the future in order to help keep up with rising inflation. In exchange for a lower amount of income in the initial years, the amount of your income can rise, based on the most recently published Consumer Price Index-All Urban Consumers (or CPI-U) index. Choosing this alternative can help you to ensure that your incoming cash flow will be higher down the road, which in turn, can help to better ensure that your purchasing power will not continue to decrease over time.
You can even compare your options for income base growth via the product brochure.
For instance, the chart that is presented shows you your guaranteed growth and potential for growth (non-guaranteed) of your income base after ten years (prior to electing income).
If you go the route of choosing this income rider, be sure that you understand that the accumulated value of the annuity and the income base account values are not one in the same. Rather, the accumulated value is used in determining the cash surrender value of the annuity. The income base, however, is used only for calculating your lifetime income withdrawals.
While the income rider that is available with the Athene Ascent annuity can be a nice added option, it is important to note that it does come with a tradeoff. (Aka, there is no such thing as a “free lunch” – especially when it comes to insurance and annuity products!)
In this case, there is an extra charge for having this rider added to your annuity – and the additional fee will be deducted on a monthly basis from your annuity’s Accumulated Value and Minimum Guaranteed Contract Value (MGCV), starting on the Rider Effective Date (in most states).
The rider charge for the income rider will be calculated as a percentage of the income base. Also, if you do want to include this rider on the Athene Ascent annuity, you will have to do so at the time that you initially purchase this product.
(To find more specific details on the exact percentage and amount that may be deducted, be sure to check your Athene Ascent Income Rider Certificate of Disclosure that should be presented to you before you move forward with the actual purchase of the annuity).
In addition, be sure that you also read all of the “fine print” regarding this rider, as there may be situations that can cause the income rider to be less than you anticipate. For example, your Lifetime Income Withdrawals may either be reduced or stopped altogether, if you take excess withdrawals from the annuity.
In this case, if your excess withdrawals, withdrawal charges, premium bonus vesting adjustment, and/or market value adjustments (MVAs) reduce your annuity contract’s accumulated value to zero, then your lifetime income withdrawal payments will cease – and this rider will then terminate.
Here again, be sure that you check the product details brochure so that you can consider the different income options you have available, as well as which one – if any – will work for you and your specific objectives.
Who Should Consider Adding the Income Rider to their Athene Ascent Annuity?
Although the income rider on this annuity may not be right for everyone, it could be a viable option if you are looking for:
- Guaranteed Growth
- Guaranteed Lifetime Income
- Income Flexibility
- Various Payment Options
- Protection of Principal
- Guaranteed Income for Your Spouse
Also, if you are age 70 1/2 or older and you are subject to the IRS Required Minimum Distribution rules (where you are required to withdraw at least a minimum amount of money from your plan each year) – otherwise you’ll face a penalty, the Athene Ascent annuity income rider could also be beneficial for you.
This is because the Required Minimum Distribution (RMD) amounts that are more than your annual Lifetime Income Withdrawal amount will not be subject to any charges, and they also will not reduce any of your future Lifetime Income Withdrawals.
Still Have Questions About the Athene Ascent Annuity Income Rider?
Even after reading the fine print about the Athene Ascent Annuity Income Rider, you may still have some additional questions or concerns about whether or not this is the right option for you.
So, if you need some unbiased advice about how this product works, and whether it may or may not be for you, then please feel free to reach out to us via our secure contact form here. Our team of annuity geeks is ready to help you with better understanding your future retirement savings and income alternatives.