Independent Review of the Allianz Retirement Pro Variable Annuity
What’s Covered in this Review
In this review, I will go over the following information on the Allianz Retirement Pro annuity:
- Product Type
- Current rates
- Realistic long term investment expectations
- How it is 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.
You may initially notice, that like many other annuities, the Allianz Retirement Pro variable annuity can perform relatively well in certain situations. There are, however, other circumstances where it may not perform well – especially depending on what your particular goals for the annuity may be.
Annuity And Retirement Income Planning Information That You Can Trust
You may have found this website by accident. If so, and you aren’t sure what we do, you will likely notice that we are very different than other annuity marketing websites that you see out there on the Internet touting benefits such as:
- Lowest Fees
- Top Rated Companies
- 7-8% Returns with NO RISK
The funny thing is that even though many other sites may be opposed to annuities, they still don’t really even know how these products work.
But, the site that you have landed on right now is completely different. What we do here at Annuity Gator is publish the most objective and thorough annuity reviews that you will find online. And, we have been doing so for longer than most any other site.
What we want you to be able to do is take this information and decide for yourself whether or not an annuity will be right for you and your specific financial situation. So, let’s go ahead and move forward!
Allianz Retirement Pro at a Glance
Product Name Retirement Pro Variable Annuity
Type of Product Variable Annuity
Standard & Poor's Rating AA (Very Strong)
Phone Number (800) 950-5872
Opening Thoughts on the Allianz Retirement Pro Variable Annuity
Overall, variable annuities are really designed to do two primary things. These are growing principal and producing income. However, the reality is that these types of annuities are not all that good at the latter task. One of the primary reasons that they aren’t very good at producing income is because of the risk that variable annuities can present both to investors, and to the insurance carriers that offer them.
Due to the fact that the value of a variable annuity will typically fluctuate so much, it is common for the underlying insurance company to guarantee a lesser amount of income from its variable annuities than it does for the fixed annuities that it offers – even though the fixed annuities are considered a “safer” alternative.
So, for each dollar that you put into a variable annuity, it could potentially offer you less in future income than a fixed annuity would for the same amount of deposit. And, because of this, if your main goal for purchasing the annuity is future retirement income, then the reality is that a variable annuity may not be your best choice.
Regarding the purchase of a variable annuity for the growth of principal – here you will have the opportunity for high return. For instance, in the case of the Allianz Retirement Pro variable annuity, this annuity offers approximately 80 different investment options, along with tax-deferred growth. However, because it is a variable annuity, your funds will still have market exposure, and therefore, they will also have downside market risk.
Also, a variable annuity will generally charge a number of fees to its investor. For instance, many variable annuity owners may not realize that not only are they paying fees for the annuity itself, but they are also being charged fees for the investments, such as mutual funds, that reside within the variable annuity. All of these fees, coupled with market volatility, can often make obtaining a high return with a variable annuity challenging.
Before we get into the gritty details, here are some legal disclosures…
This is an independent annuity review. Because of that, this review does not include any recommendation to either purchase or sell an annuity product. Allianz has not endorsed this annuity review in any way, nor have we received any type of compensation for providing this review. The information is simply meant to be an opinion so that readers can view our personal perspective when determining the potential advantages and the potential drawbacks of this particular annuity product – as well as whether it may or may not fit in with their financial goals. Prior to purchasing any type of financial product or service, it is important that you pursue your own due diligence, as well as consult with a properly licensed and competent financial advisor before you move forward. In doing so, you may then more precisely ensure that the product or service that you are considering may fit with your circumstances. All of the trademarks, names, and materials that were used with this annuity review are the property of their respective owners.
How Allianz Describes The Retirement Pro Variable Annuity
The Allianz Retirement Pro variable annuity is described as offering a versatile investment platform that offers both a base account, along with an income advantage account. Investors can allocate purchase payments to either of these accounts – or both.
The base account offers approximately 80 investment options, which provides a wide array of asset classes in order to help investors meet their specific goals. The income advantage account offers approximately 20 different investment options. Also, as with other types of annuities, the Retirement Pro allows tax-deferred growth of the funds that are inside of the account(s).
The Allianz Retirement Pro annuity also allows investors to transfer their funds between the account prior to taking income.
While the income advantage account in this annuity offers income and death benefit guarantees, the base account has no protection benefits and therefore, these funds are at risk to market volatility.
How Financial Advisors Might “Pitch” This Annuity
The Allianz Retirement Pro variable annuity does offer a number of investment options to choose from, as well as the ability to choose between a base account and an investment account – or both. Therefore, it is likely that a financial advisor will key in on this aspect of the annuity when discussing it with a client. This is especially the case, as it can allow a client the ability to construct a more diversified portfolio that can better fit their needs.
Another big “selling point” of this annuity is its flexibility in that investors can transfer their funds to the income advantage account at any point prior to taking income payments (subject to certain guidelines).
Per its advertising materials, this annuity also has no withdrawal charges, meaning that investors can have immediate access to their money – both in the base account and the income advantage account if an unexpected need should arise.
It is important to keep in mind, though, that if you plan to use this particular annuity – or any variable annuity – as a source of guaranteed lifetime income, you will really need to closely examine it first. This is because, due to the potential risk to the principal in a volatile market, there can often be an effect on the actual amount of income that you will end up receiving in retirement.
With that in mind, if retirement income is your ultimate goal for purchasing this annuity, then there really may be some other annuity options that can be much better suited for performing this task.
In addition, even with the well-diversified array of investment options that are offered through the Allianz Retirement Pro annuity, this annuity will still have exposure to market risk. So, here again, you will need to take into consideration just how much risk you want to take with your funds, based upon your overall financial goals, time horizon, and overall plans going forward. If you’re wondering if this annuity is right for you, or if you have questions and need a little help getting pointed in the right direction; just reach out via our secure contact form here.
What About the Allianz Retirement Pro Annuity’s Fees?
Regarding fees on the Allianz Retirement Pro variable annuity, you will also need to be aware of where you will be charged. This is because variable annuities can be known for charging high fees in comparison to many other financial products.
With this particular annuity, you will have an upfront load of 3.5%. So, right off the bat, you will start out needing to make up for that in order to just break even. To give you a better idea of just how much you would need to make up, let’s say you made an initial deposit into the annuity of $500,000. With an up-front load of 3.5%, you would already be down $17,500.
You will also have an annual contract maintenance charge of $75. In addition, there is an annual base account fee of 0.30%, as well as an income advantage account fee that can range between 1.00% and 1.75%, depending on whether you have a single or a joint account for income.
With variable annuities, you will also need to keep in mind that the mutual funds that are inside of the account will typically also be charging their own internal management fees each year. Because of this, the charges can really add up.
The Annuity Gator’s End Take on the Allianz Retirement Pro Variable Annuity
Where it works best:
- When taking a closer look at the Allianz Retirement Pro variable annuity, it can generally work best for investors who want to have the opportunity for market growth, along with the ability to diversify their funds – yet who also want a vehicle for retirement income in the future. This is because the annuity provides the opportunity to invest in approximately 80 different funds in its base account, in a variety of different asset classes.
- In addition, the annuity – like other annuity contracts – also provides tax-deferred growth on the funds. So, if you have already maxed out an employer-sponsored retirement plan such as a 401(k) and/or an IRA account and you are still looking for avenues for tax-advantaged investing, then this could be a good option to do so.
- Also, on the income side, because this vehicle does offer a lifetime income stream, it can still be a way to help in alleviating the worry about outliving savings or income in retirement – which is a major concern for many retirees today.
Where it works worst:
- If you do not intend to use the income benefit on this annuity, then it might not be an ideal product choice, and another more suitable financial vehicle could be considered. This is because, due to the high fees that can be charged inside of the annuity, and through the mutual funds, going this route can be a pretty expensive way to invest in equities.
When considering any financial product or service, it really is key to determine exactly what your intention is for that product or service prior to jumping in. For example, it might seem at first glance that a particular product offers both growth and income opportunity. However, after taking a closer look, those features may come at a high price.
In the case of the Allianz Retirement Pro variable annuity, there are definitely some great features about it – such as the opportunity to invest in roughly 80 different options in the base account, plus 20 in the income advantage account. This can provide a nice amount of diversification.
Also, this annuity offers the ability to receive guaranteed lifetime income, which for many people is a primary concern. But, this really has to be weighed out in terms of the potential risk to the principal that is inside of the annuity during the accumulation period, based on the market volatility that it may face.
Given that, the only way to really know if this annuity will be a proper fit for you is to have it tested. We offer this testing at no charge. So, just contact me and we can provide you with an illustration of what this annuity may be able to do for you.
Have Questions on the Allianz Retirement Pro Annuity? See any Mistakes?
If you have any further questions about the Allianz Retirement Pro annuity, or if you notice that any of the information included in this review is incorrect, then please contact us and let us know.
Throughout the past several years, annuities have become much more popular. This has been due in large part to the guaranteed lifetime income that they can provide to investors. Because of this, there have been many financial advisors who have been pushing annuities on their clients – regardless of whether or not the annuity even makes sense for these individuals.
However, annuities can also be confusing products – and you really need to know exactly what it is that you are getting into with your retirement savings. You really don’t want to make any costly mistakes – especially one that you will not be able to get out of without being charged a penalty.
With that in mind, if an annuity does not seem to make sense for you, then it is important that you know and say something now. If, however, an annuity does make sense for you and your overall financial situation, then it can be a primary component of your overall portfolio.
Also, if there may be other investors that you know who might possibly benefit from an annuity, then please feel free to share this post with them. Today, there are many individuals who are getting conflicting information about annuities. Our goal is to offer information about these financial vehicles in an objective manner so that people are better able to understand them and how they work.
So, if you can help to spread the word, then it can really be beneficial. You could do so, for example, if you have a Facebook account by just clicking on the Facebook icon here so that the article can be shared and so that more people can find it, and hopefully, can benefit from it.
In addition, if you do happen to notice if any details in this review are outdated or incorrect, then please do feel free to contact us and let us know. Just like any other financial product, annuities do often change. So, it can be difficult to keep up with all of these details. We will be happy to make any updates that are necessary in order to be sure that the information is clear and easy to understand.
If you’re wondering if this annuity is right for you, or if you have questions and need a little help getting pointed in the right direction; just reach out via our secure contact form here.
The Annuity Gator