American Pathway Fixed 7 Review

The hypothetical historical performance provided herein showcases the annualized return of allocation strategies, representing the investment's annual growth rate considering compounding effects. Similar analyses can be found for each account in official fixed index annuity illustrations provided by insurance carriers.

What's not reflected:
The annualized return does not encompass rider charges, strategy fees, or applicable premium bonuses.

Notes on rates:
The information presented assumes the annuities' current caps, spreads, participation rates, and other related rates, without guarantee.

No guarantees:
These actual elements are subject to change over time, resulting in potentially higher or lower outcomes. Additionally, no single index consistently outperforms in every scenario. It is advisable to consult with a properly licensed and educated annuity professional before making any decisions.

There are no sales or annual fees associated with this product. 

American Pathway Fixed 7 does not charge any annual and sales fees. Since American Pathway Fixed 7 is a fixed annuity, when you purchase the contract, you lock in an interest rate. This rate is guaranteed by Corebridge Financial.

The American Pathway Fixed 7 annuity offers you some flexibility when it comes to your guaranteed interest rate. 

• If you choose to make a single lump-sum payment (single premium), you can decide how long you want the initial interest rate to be locked in. You have the option to secure a guaranteed rate for the first year, the first three years, or the full seven years. This allows you to tailor the guarantee period to your investment goals and preferences.
• For the Seven-Year Guarantee with a Market Value Adjustment variant, you lock in a fixed interest rate for the first seven years. However, there's a trade-off. If you select this option and withdraw money during the first seven years (when withdrawal charges apply), and the amount exceeds the penalty-free limit, you might be subject to a Market Value Adjustment (MVA) in addition to the withdrawal charge. This MVA can further reduce the amount you receive.
   

An annuity surrender charge schedule functions as a contractual agreement that outlines the financial penalties an annuity owner would incur when making withdrawals prior to the expiration of a designated surrender charge period, which typically spans several years.

The American Pathway Fixed 7 permits free withdrawals to a certain limit. If said limit is exceeded, an annuity contract holder will be subjected to additional fees as follows:  

One of the biggest advantages of this annuity is that it offers considerable flexibility in how you can secure your retirement savings. 

The annuity can be supplemented with a Return-Of-Premium Guarantee. With this feature, you can surrender the annuity at any time and get your money back. The amount you receive will be the greater of:

• The initial amount you invested (single premium) minus any previous withdrawals you made.
• The current value of your contract (minus any surrender charges or market value adjustments).
• A minimum guaranteed value outlined in your contract.

However, one should keep in mind that adding this guarantee might slightly reduce the interest rate earned on the investment compared to an annuity without this feature.

The MVA can affect your withdrawal amount during the first seven years if you take out more than the allowed penalty-free amount.

• If interest rates are higher at the moment of making the withdrawal than when you purchased the annuity, the MVA will reduce your withdrawal amount.
   
• If interest rates are lower at the moment of making the withdrawal, the MVA may apply a positive adjustment to your withdrawal amount. This adjustment helps mitigate potential shortfalls caused by the lower interest rate environment and aims to ensure you receive a fair withdrawal amount considering the current market conditions.

This option allows you to cancel the annuity and receive the greater of your initial premium (minus any withdrawals), the contract value minus charges, or the minimum withdrawal value. Selecting this option may result in a slightly lower initial interest rate. 

The American Pathway Fixed 7 offers several advantages that may be attractive to certain investors. This annuity locks in your interest rate for the first seven years, providing predictable and assured growth on your principal amount during this crucial period.

You can choose to lock in your interest rate for the first year, three, or seven years, giving you some control over the guaranteed growth period.
Additionally, investors can access a limited amount of money each year (up to 15% with some restrictions) without incurring surrender charges, which is more generous than most fixed annuities on the market propose. 

In our opinion, this retirement investment product is a quality one but will be more suitable for investors with more conservative growth rate ambitions.