Nationwide Secure Growth® Fixed Annuity Review: Everything You Need to Know
Overview
The Nationwide Secure Growth® Fixed Annuity is a single-premium deferred fixed annuity designed for long-term savings with guaranteed interest rates. It provides principal protection, tax-deferred growth, and flexible payout options, making it a strong option for individuals seeking a secure retirement income strategy.
Key Features
1. Guaranteed Principal & Interest Rates
- Your principal is fully protected as long as you do not withdraw before the contract matures.
- Offers fixed interest rates for chosen terms (5 or 7 years).
- Interest rate may be higher for initial purchase payments of $100,000 or more.
2. Tax-Deferred Growth Advantage
- Earnings grow without immediate tax liability, allowing for compound growth over time.
- Taxes are only due upon withdrawal, providing an advantage over taxable accounts.
3. Flexible Withdrawal & Liquidity Options
- Penalty-Free Withdrawals (up to 10% per year of the total contract value).
- No withdrawal penalty for:
✅ Long-term care or terminal illness waivers (not available in CA & NY).
✅ Required Minimum Distributions (RMDs) from tax-qualified contracts.
✅ Annuitization for guaranteed income.
✅ Death benefit payout to beneficiaries.
4. Market Value Adjustment (MVA)
- If withdrawals exceed the free amount during the surrender period, an MVA may apply:
- If interest rates rise, the MVA reduces withdrawal value.
- If interest rates fall, the MVA increases withdrawal value.
5. Death Benefit Protection
- The contract value is paid to beneficiaries, avoiding probate delays.
- Provides a direct payout option to named beneficiaries.
6. Return of Purchase Payment Rider
- Guarantees a return of the original principal amount (minus withdrawals & fees) if surrendered during the CDSC period.
- Available at no additional cost but may reduce the interest rate.
Withdrawal Charges (CDSC Fees)
The Contingent Deferred Sales Charges (CDSC) schedule varies based on contract term:
Contract Year | 7-Year Term CDSC | 5-Year Term CDSC |
|---|---|---|
Year 1 | 7% | 7% |
Year 2 | 7% | 7% |
Year 3 | 6% | 6% |
Year 4 | 5% | 5% |
Year 5 | 4% | 4% |
Year 6 | 3% | 0% |
Year 7 | 2% | 0% |
Year 8+ | 0% | 0 |
Potential Drawbacks
❌ Withdrawal Charges Apply
- Withdrawals exceeding the 10% free withdrawal limit may be subject to CDSC fees & MVA.
❌ Limited Growth Potential
- Compared to variable or indexed annuities, fixed annuities have lower earning potential.
❌ Not Available in All States
- Some features (like long-term care & terminal illness waivers) are not available in CA & NY.
Who Should Consider Nationwide Secure Growth?
✅ Retirees or conservative investors looking for stable, guaranteed growth.
✅ Individuals wanting principal protection with tax-deferred growth.
✅ Those planning for a long-term income strategy with flexible payout options.
✅ People seeking a legacy option to pass assets directly to beneficiaries.
Final Verdict
The Nationwide Secure Growth® Fixed Annuity is a strong choice for individuals prioritizing safety, tax efficiency, and guaranteed growth. While growth potential is limited, it provides reliable, fixed returns and flexible withdrawal features. Investors should consider liquidity needs and surrender fees before purchasing.
