Buy a Variable Annuity in Washington

What to Know Before Purchasing a Variable Annuity in Washington

Variable annuities can offer both long-term growth potential and retirement income, but they come with a unique set of features that Washington investors should understand before making a purchase.

Unlike fixed annuities, variable annuities are investment-linked and can rise or fall based on market performance. For Washington residents, buying one involves working with a licensed agent and understanding both the financial and regulatory factors specific to the state.

How to Buy a Variable Annuity in Washington

If you're considering a variable annuity in Washington, here’s a straightforward step-by-step guide:

1. Work with a Licensed Professional: Only financial advisors and insurance agents with proper licensure from the Washington State Office of the Insurance Commissioner and FINRA registration (typically Series 6 or 7 and 63) can sell variable annuities.

2. Determine Suitability: A licensed advisor will complete a suitability assessment to ensure that a variable annuity fits your financial goals, time horizon, and risk tolerance.

3. Select the Right Product: You’ll compare providers, investment subaccount options, optional riders (like guaranteed income or death benefits), and fees.

4. Complete the Application: Once you’ve selected a product, fill out the application, make your initial contribution, and receive a prospectus detailing all terms, risks, and costs.

5. Free-Look Period: Washington law requires insurers to offer at least a 10-day free-look period, during which you can cancel the annuity contract and receive a full refund.

Estimated Income from a $100,000 Annuity

If you invest $100,000 into an annuity and start receiving income at age 65, the payout will depend on the contract type and selected options:

• Fixed Immediate Annuity: Approximately $500–$600/month, guaranteed.

• Variable Annuity with Income Rider: Around $400–$550/month, depending on the rider terms and company.

• Pure Variable Annuity (without rider): Varies month to month based on market performance—no guarantees unless an income floor is added.

The flexibility and growth potential make variable annuities appealing, especially if you're not planning to begin withdrawals right away.

Monthly Payments from a $50,000 Annuity

A $50,000 annuity will generate about $250–$300/month for a life-only fixed payout starting at retirement age. With a variable annuity, this figure depends on:

• Market performance

• Chosen riders (if any)

• Age and health at the time of purchase

• Payout options such as joint life or period certain

While this may be a modest amount, it can still complement other retirement income sources.

Potential Monthly Income from a $300,000 Annuity

A $300,000 investment provides greater income flexibility. For a 65-year-old starting withdrawals immediately:

• Fixed Annuity: May offer $1,500–$1,800/month

• Variable Annuity with Rider: Likely around $1,200–$1,500/month, with potential for growth if the market performs well

These figures can vary significantly based on product terms, selected features, and investment results.

Is It Legal to Buy a Variable Annuity in Washington?

Yes, variable annuities are fully legal and widely available in Washington State. However, because these products include investment components, they’re regulated by both state insurance authorities and federal securities regulators. Always verify that the company and agent you’re working with is properly registered with the Washington State Office of the Insurance Commissioner and FINRA.

Additionally, the state has strong consumer protection regulations requiring agents to assess whether an annuity purchase is appropriate based on your financial situation.

Exploring Today’s Variable Annuity Products

Variable annuities have evolved to offer a broad mix of features, including:

• Diverse Investment Subaccounts: Choose from equity, bond, balanced, and index-tracking options.

• Income Riders: Add guarantees like lifetime withdrawal benefits or stepped-up income bases.

• Tax-Deferred Growth: All earnings accumulate without current taxation.

• Death Benefits: Some policies offer return-of-premium or enhanced death benefits for beneficiaries.

Products vary by provider, and it’s important to compare terms, fees, and performance history before selecting a contract.

Finding a Place to Buy an Annuity

In Washington, you can buy annuities through:

• Independent Financial Advisors

• Insurance Agents

• Broker-Dealers

• Banks and Credit Unions

• Directly from Insurance Companies

Be sure your chosen representative is licensed and has a track record of placing clients in suitable annuity contracts. Reputable providers will take the time to explain each option clearly and help you weigh the pros and cons.

Role of an Annuity Agent in Washington

An annuity agent in Washington must:

• Hold a life insurance license issued by the state

• Maintain ongoing training to stay compliant with Washington insurance regulations

• Conduct a suitability review before recommending any annuity product

• Clearly explain the contract features, fees, risks, and benefits

Agents can be tied to a single insurance company or operate as independent brokers who present multiple options. Either way, it’s crucial they put your interests first.

Brokers vs. Agents: Understanding the Difference

An annuity broker often has access to more products than a captive agent. Brokers can help you:

• Compare annuities across multiple insurance carriers

• Analyze contract details side-by-side

• Customize product features based on your retirement strategy

While both brokers and agents must act ethically, brokers generally provide more product flexibility and objective advice.

Nationwide Advisory Retirement Income Annuity in Focus

The Nationwide Advisory Retirement Income Annuity (ARIA) is a fee-based variable annuity designed for long-term investors. Key features include:

• Low Annual Fees: Often 0.5%–1.2% depending on investment and rider selections

• No Commissions: Sold only through registered investment advisors (RIAs), promoting fee transparency

• Guaranteed Income Option: Lifetime withdrawal benefit ensures steady income

• Diverse Subaccounts: Choose from Nationwide's managed portfolios or build your own

This annuity is popular with fee-only advisors and clients who want transparency and professional portfolio oversight.

Choosing a Reliable Annuity Insurance Company

When selecting an annuity, the strength of the issuing insurance company matters. Look for:

• High Financial Ratings: Choose companies rated “A” or better by AM Best or Moody’s

• Clear Disclosures: Read the annuity prospectus and understand how fees are charged

• Long-Term Stability: Go with companies that have a proven track record and reliable service

Top-rated companies operating in Washington include Nationwide, Lincoln Financial, Pacific Life, Allianz, and Prudential.

Nationwide Annuities Overview

Nationwide is a trusted name in the retirement income market. Their suite of annuity offerings includes:

• Variable Annuities: Growth potential with optional income protection

• Fixed Indexed Annuities: Market participation with downside protection

• Immediate and Deferred Income Annuities: Lifetime income with customizable payout options

• Fee-Based Annuities: Ideal for those working with fiduciary advisors

Nationwide combines competitive pricing with flexible product design, making it a strong choice for Washington residents planning their retirement income strategy.

FINAL THOUGHTS

Buying a variable annuity in Washington can be a smart move when planned carefully. With the right strategy, these products offer growth potential, optional income guarantees, and tax-deferred accumulation. Whether you’re investing $50,000 or $300,000, the goal is to align your annuity with your long-term retirement objectives.

Alpha Book Publisher recommends working closely with a licensed and transparent advisor who understands Washington’s insurance regulations and can walk you through the full spectrum of available products. The right variable annuity—selected and managed wisely—can serve as a powerful tool in your retirement income toolkit.