Nationwide Destination B Annuity offered by Nationwide

Why the rant about simple interest?

These things are all based on simple interest.

Also, the benefit is there to serve as a floor in the event that overall stock and bond market performance is lousy and less than 7 percent.

The guaranteed minimum is not the only option that can increase the income benefit base.

Over the course of 10 years, it is likely that the minimum 7 percent guarantee will come into play less often than a market return adjustment to the contract value.

Who wouldn't want to invest with a floor of guaranteed return in this environment?

The upside is there if things are all rosy in the market, but the protection is also there if things don't turn-out as well as expected.

Simple interest is sure better than no interest.

The 7 percent minimum guarantee that is referenced by the other reviewer is simple interest - not compound interest.

For someone who invests $100,000 in this variable annuity, the minimum guaranteed increase in the income benefit would be $7,000 per year.  

If this person holds onto the VA and does not take any withdrawals for 10 years, the income base would have a guaranteed minimum of $170,000.

If the benefit were based on compound interest rather than simple interest, that same income base would be $196,715.

A $26,715 difference is pretty meaningful.

Now assume that the actual income withdrawal benefit is 5 percent.  

5 percent of the $170,000 is $8,500 per year.

5 percent of $196,715 is $9,835.