What is a deferred variable annuity?

Deferred variable annuities allow clients and advisors to determine how assets are invested by choosing from a selection of 90+ investments called subaccounts. These investments can include stocks, bonds, money markets, etc. As the value of these investments fluctuate based on the ups and down of the market, so will the contract value.

In contrast to a fixed annuity, which provides a guaranteed interest rate, variable annuities have greater growth potential but can also lose money. The wide range of investment options with different risk and growth potential can provide additional flexibility in structuring an investment plan for retirement savings.

What variable annuities offer


Different options for how you want to receive income. Either get payments you will not outlive or take your money as you need it.


No yearly tax bill on growth within the more than 90 investment choices made up of equities, bonds and fixed accounts.


Death benefits that help provide for the future financial needs of a spouse, loved ones or charities.

Variable annuity features

Variable annuities allow you to set money aside for a specified time in the future. Some of the features of variable annuities include:

  • Tax-deferred growth potential in the accumulation phase1
  • Death benefits for your loved ones or charities
  • Tax-free/penalty-free transfers among underlying investment options
A variety of payout options, including systematic withdrawals and annuitization, are available with no additional cost. We also offer living benefit riders (for an additional cost) that may help provide income. Just keep in mind that you may face surrender charges if you withdraw your money early.
Not sure if a variable annuity is right for you? Compare all annuity types.
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Topics to discuss with your advisor

  • Choosing investment options. Consider your goals, time horizon and risk tolerance when choosing funds.
  • Risk tolerance. What type of investor are you?
  • Payout options. What are the different ways you can take income from a variable annuity?
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[1] Earnings are taxed as ordinary income when withdrawn. There may be a 10% federal tax penalty on withdrawals before age 59½. Naturally, your death benefit and the cash value of the annuity contract will be reduced if you take any early withdrawals.

Keep in mind that investing involves market risk and your investment return, principal value and periodic payments will fluctuate over time. You could end up with more or less than the amount you invested.

An annuity is a long-term, tax-deferred investment designed for retirement. It will fluctuate in value. It allows you to create a fixed or variable stream of income through a process called annuitization. It provides a variable rate of return based on the performance of the underlying investments. An annuity isn’t intended to replace emergency funds or to fund short-term savings goal.

You should also know that an annuity contains guarantees and protections that are subject to the issuing insurance company’s ability to pay for them. But these guarantees don’t apply to any variable accounts that are subject to investment risk, including possible loss of your principal.

An annuity is a contract between you and an insurance company, and it’s sold by prospectus. You should read these documents. They describe risk factors, fees and charges that may apply to you. Variable annuities have fees and charges that include mortality and expense, administrative fees, contract fees and the expense of the underlying investment options.

Neither Nationwide nor our representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions.

Before you invest, please read the prospectus carefully and consider the investment objectives, risks, charges and expenses of the annuity and its underlying investment options before you invest. Prospectuses for products and underlying funds contain this and other important information. To obtain prospectuses, call your investment professional, contact Nationwide, click links to product information or go to nationwide.com/prospectus.