A fixed annuity is a long-term contract you buy from an insurance company to help you accumulate assets for retirement. Many fixed annuities with a market value adjustment (MVA) feature allow you the flexibility to customize your investment by splitting it among several different guarantee periods that offer different interest rates – typically, the longer the period, the higher the interest rate.
Nationwide Platinum EdgeSM offers a guaranteed interest rate. Early withdrawals will trigger a market value adjustment and may have a contingent deferred sales charge. Guarantee terms range from 3 to 10 years, giving you the flexibility to match the product's interest rate term to your financial goals. This type of annuity may be appropriate for individuals who are looking for the potential to earn higher interest rates than traditional fixed investments. A financial advisor can be a valuable resource when evaluating the appropriateness of a market value adjusted fixed annuity.
It's important to remember, when discussing Nationwide annuities, that all guarantees and protections are subject to the claims-paying ability of Nationwide Life Insurance Company.
More about market value adjustments
Withdrawals made before the end of a guarantee period will result in a market value adjustment. Depending on how interest rates have changed since the guarantee period was elected, a market value adjustment could increase or decrease the amount of the distribution. Generally speaking:
- If Treasury rates have gone up since the guarantee period was elected, the market value adjustment will cause an unfavorable adjustment to any withdrawals before the end of a guarantee period.
- If Treasury rates have declined since the guarantee period was elected, the market value adjustment will result in a favorable adjustment through a credit applied to your contract when you make a withdrawal.
Annuity contract considerations
Please note that withdrawals may be subject to contingent deferred surrender charges (CDSC) and a market value adjustment (MVA). Early withdrawals, those taken prior to age 59½ , may be subject to a 10% early withdrawal federal tax penalty in addition to ordinary income taxes. All withdrawals will reduce the death benefit and contract value.
Federal income tax laws are complex and subject to change. The information provided is based on current interpretations of the law and is not guaranteed. Nationwide® and its representatives do not give legal or tax advice. You should consult your attorney or tax advisor for answers to your specific tax questions.