Athene Performance Elite 10 Plus
Every time I notice a trend it is well past time to talk about it. More than a dozen people in the past month have come asking for a second opinion about the Athene Performance Elite 10 Plus contract so that means hundreds if not thousands more have encountered it.
I’m going to document my opinion so that anyone who doesn’t feel like reaching out can get not only an analysis but a better option. I’m going to prove the second part of that and let everyone know where I got the information.
First, Athene is a Reliable Choice with Competitive Products
Athene is a decent company with a solid lineup of products. From multi-year fixed annuities to fixed indexed annuities with guaranteed income riders, Athene is usually in the mix of most competitive situations. In the past, I’ve had a few customer service issues with the company and decided to stay away from them for the most part. But once in a while, they had a really nice income product so I still used the company from time to time. Last year they were very competitive in the fixed annuity market so I went that direction with a handful of people. Customer service seems to have improved quite a bit so I’m not as reluctant to recommend Athene as I once was.
A Closer Look at the Athene Performance Elite 10 Plus
The product in question is the Performance Elite 10 Plus, an annuity focused on asset accumulation. The Plus means an additional bonus and you can get it with or without. For those who take it, you’ll get up to a 16% first-year bonus and those who don’t will get up to 10%. Certain states have restrictions on bonuses so the numbers above are what most people will see but some won’t. The first problem I have with the contract is that the enhanced bonus comes with an annual fee of .95% so it costs something for the most part you would be just slowly giving back what you gained in the beginning.
Key Features and Benefits
There are a few other benefits that come with the enhancement and those are listed below:
- Enhanced Liquidity– take up to 20% free withdrawal in any year when the full 10% withdrawal wasn’t taken the year before. This sounds nice but it’s fairly easy to do without paying a fee. You don’t need the enhancement to take 10% withdrawals the day before your anniversary and 10% the day after. It works out about the same but doesn’t cost you anything.
- Return of Premium– you can get your money back after the fourth year if you don’t like it or your plans change. This is actually a decent benefit but in most cases, growth on the contract exceeds surrender fees by the fourth year so I don’t exactly think it’s a deciding factor.
- Enhanced Annuitization– this gives you the option to commute the account value for a stream of guaranteed lifetime income at an earlier date than would usually be available. Since most people don’t use accumulation contracts that way I also don’t consider this to be a deciding factor.
The Significance of Growth in Accumulation Contracts
Since this is an accumulation contract, growth is important, right? There are several index accounts available for earnings potential but I’m going to keep this simple. The agents who sell this will no doubt show you the highest numbers but let me remind everyone that familiarity with the index and reasonable expectations are much more important. In order to keep it simple just look at the fixed rate account of 3.6% annually and the S&P 500 with an annual cap of 8.25%. These are both below competitive rates in the market, which is to be expected with a bonus annuity. The bonus means you have to give something on the back end. There is no such thing as free money.
It would be fair to mention that this contract offers enhanced earning potential for an additional fee. 1.25% extra each year will give you higher cap or participation rates on certain index options. The subject of this newsletter and podcast is not to debate whether that fee is worthwhile. Just remember that you have a choice to pay it or not. Additionally, it’s important to note that between the 10 and 10 Plus, there is no distinction between growth potential or enhanced performance fees.
Should You Take The Enhanced Bonus?
At this point, I’d say that if you like this contract then I would recommend the version without the enhanced bonus. Just take the 10%, avoid the fee, and learn how to use it if you like all the other benefits. Then something else caught my eye. If you don’t take the Plus version with enhanced bonus then you’ll only be allowed a free withdrawal equal to 5% annually. That’s a deal breaker for me, as it would still work for accumulation but would fall short of the benefits needed for other retirement planning objectives. I suppose if you’re going to park your money there and you know you’ll never touch it then it will probably work out just fine. For those who want the extra options and don’t want to pay a fee, you need to find a different contract.
Athene Performance Elite 7 as an Alternative
Several people who come this far will undoubtedly want to know what I would recommend as an alternative. As luck would have it, I’ve got the perfect option. And I don’t have to talk you out of Athene products to get you to look at it. This one is the Performance Elite 7 so it’s basically the same thing with a shorter surrender term. The base version doesn’t have a bonus and the Plus version pays up to 6%, following the same state rules as the longer-term contract. Once again I would stay away from the bonus and just go with something simple.
The great news is that you can get a 10% free withdrawal even if you don’t pay for the bonus. And when it comes to growth, you’ll see why this looks like the obvious choice. The fixed rate on the Performance Elite 7 is 4.15% and the cap rate on the S&P 500 is 10% annually. The same would be true with all other index options in that the seven-year option gives you much more growth potential. You don’t need to pay a fee to get a giant bonus and some extra benefits that won’t really deliver that much. Don’t forget it’s a shorter surrender schedule too!
Always Choose The Right Annuity Contract for You
Some people I’ve talked to like how the Athene Performance Elite 10 Plus looks and the options available that offer really good growth potential and protection from market losses. For those people, I would always recommend the seven-year option. Why don’t the other agents sell it the same way? Well, they do get paid more for the longer-term deal but I can’t explain why they don’t at least give you an option.
Buy a ten-year annuity if it offers more but not less. I do have other contracts I like better but you’ll hear no complaint from me on this, so long as you buy the right one.
Give me a call next week if you’d like to look at this in more detail.
Podcast about Annuity Review: Athene Performance Elite 10 Plus
What You’ll Learn From This Episode:
[4:22] Why does Athene have the best product for many situations?
[7:37] State-regulated caps on bonuses
[7:55] The benefits of paying the enhancement fee
[11:14] A closer look at Athene’s different index options
[13:17] A comparison of annuities (index, fixed rate, and accounts)
[14:00] There is no distinction between growth potential or enhanced performance fees
[15:50] Why is there no advantage in purchasing the ten plus?
[18:00] The growth potential with and without fees (fixed account, S&P 500 Cap, Athene)
[21:01] You purchase a ten-year annuity if it offers more, not less.
“Growth is important. So you’re protecting all the downside if you want to grow.”
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Last Updated on February 7, 2024 by Bryan Anderson