Many retirees want to know or would like to know that they will remain financially secure as they continue to age. This annuity fits this goal to a tee.
Many retirees want — or at least would like — to know that they will remain financially secure as they continue to age. The American Equity IncomeShield 10 annuity fits that goal exceptionally well.
Most retirees spend little time thinking about how long they may actually live. After all, who is comfortable contemplating longevity? Yet this question becomes increasingly important around age 65, particularly for individuals in reasonably good health.
Longevity projections may satisfy curiosity or help with lifestyle planning, but they are especially critical in the realm of financial planning.
As it turns out, relatively healthy retirees often live far longer than they expect. According to data from the U.S. Centers for Disease Control and Prevention, the average 65-year-old man can expect to live nearly two more decades, while women of the same age tend to live even longer. A meaningful percentage of retirees will live well into their late 80s or 90s — a reality that significantly increases the risk of outliving one’s savings.
This is precisely why retirees considering annuities may want to take a closer look at American Equity IncomeShield 10, an income-focused fixed indexed annuity designed to provide predictable, guaranteed lifetime income, even if income is deferred for several years. For retirees seeking confidence and structure in their retirement income plan, this product checks many important boxes.
“This remains one of the more generous income-oriented annuities available, particularly for clients willing to defer income,” says an annuity professional familiar with the product.
Income Deferral Advantage
The key to maximizing IncomeShield 10 is purchasing the annuity and deferring income for a period of time. Because insurance companies price income using actuarial tables, delaying withdrawals generally results in higher guaranteed payouts later.
IncomeShield 10 rewards this patience more generously than many comparable products. For example, a healthy retiree who delays income for several years may lock in a payout rate that meaningfully exceeds what many competing fixed indexed annuities offer at the same deferral period.
In many scenarios, deferring income by three to five years can increase annual lifetime income substantially. Compared to average competitors, IncomeShield 10 has historically delivered higher guaranteed income amounts, sometimes by a noticeable margin, depending on age, gender, deferral period, and state availability.
Upfront Bonus Feature
IncomeShield 10 also includes an upfront premium bonus, which is applied to both:
- The account value (the amount available for surrender or beneficiaries), and
- The income benefit base (used to calculate guaranteed lifetime income)
This is an important distinction. Many competing products apply bonuses only to the income base, not the account value. By applying the bonus to both, IncomeShield 10 can provide greater legacy value if the annuity owner passes away before fully drawing down the contract.
Bonus percentages vary by state and product version, and are subject to vesting schedules and rider charges, but they remain a defining feature of this annuity.
Interest Rate Environment Considerations
IncomeShield 10 was designed to perform well in varying interest-rate environments. While interest rates have fluctuated in recent years, annuities priced during periods of elevated rates often provide more attractive income factors.
Equally important, many economists expect interest rates to move cyclically over time. Locking in guaranteed lifetime income during favorable pricing windows can help protect retirees from future rate declines and income uncertainty.
Company Strength & Considerations
American Equity Life Insurance Company currently carries an A- (Excellent) financial strength rating from A.M. Best. While not the highest rating in the industry, it reflects a solid ability to meet ongoing policyholder obligations.
Founded in 1995 and headquartered in Des Moines, Iowa, American Equity has built a long track record in the fixed annuity space. The company has maintained relatively stable ratings over time, which some advisors view as a sign of consistency. American Equity also continues to post strong annuity sales volumes nationally.
Fees, Minimums, and Guarantees
- Minimum investment: $5,000
- Annual income rider fee: Approximately 1.10%, which is in keeping with other competitor income rider fees
- Contract term: 10 years
- Income guarantees: Contractually locked in once elected, regardless of future market conditions
“No matter what happens in the markets or interest-rate environment, these income guarantees are contractual,” notes one annuity professional. “Once established, they do not change.”
Final Thoughts
The American Equity IncomeShield 10 remains a strong option for retirees who prioritize guaranteed lifetime income, especially those willing to defer withdrawals for several years. Its combination of income deferral advantages, bonus application to both account value and income base, and predictable guarantees make it particularly attractive for longevity-focused retirement planning.
While fees and company ratings should be carefully reviewed, IncomeShield 10 continues to stand out as a compelling solution for retirees seeking income certainty in an uncertain world.
