Destination B 2.0 review

It depends. It's a good annuity for someone who specifically wants market participation — real upside and real downside — inside a tax-deferred annuity, and who values Nationwide's A+ rating and broad fund menu. It is a poor fit for someone whose main goal is principal protection, because a variable annuity puts your contract value directly at market risk. For that buyer, a fixed indexed or buffered annuity will usually make more sense.

The main reason to buy Destination B 2.0 is tax-deferred growth with full market participation and the ability to add a guaranteed-income layer later. Someone who has maxed out other tax-advantaged accounts, wants to invest in equities or balanced funds, and likes the idea of being able to turn on lifetime income through a rider down the road is the natural buyer. The optional Lifetime Income Rider+ adds an 8% simple-interest roll-up on the benefit base for up to 10 years, which gives a deferral-minded buyer a way to build a future income floor while staying invested.

I think this product is best for a pre-retiree or retiree who is comfortable with market risk, wants tax deferral beyond what their 401(k) and IRA allow, and either wants the option of a lifetime income rider or wants an enhanced death benefit for legacy planning. Because tax deferral is the wrapper's main advantage, it generally makes the most sense for non-qualified money — buying a tax-deferred annuity inside an already-tax-deferred IRA gives up little of its core benefit. It is not a fit for conservative buyers who can't tolerate seeing their balance fall, or for anyone who wants the simplest, lowest-cost path to protected growth.

You are buying a tax-deferred investment account wrapped in an insurance contract, not a principal-protected annuity. Inside the contract, your money goes into variable subaccounts that behave like mutual funds — they rise and fall with the markets, and there is no floor unless you add a rider that provides one. The insurance company isn't guaranteeing your account value; it's providing tax deferral, optional guarantees you can pay extra for, and a death benefit. That's the trade. The "annuity" part is mostly the tax treatment and the optional riders, not a guaranteed rate.

The core of the contract is the subaccount lineup. Destination B 2.0 offers roughly 118 variable investment options spanning stock, bond, and balanced strategies, plus a one-year fixed account crediting 1.60% as of the data date in the spec (current rate, subject to change). You allocate your premium across these subaccounts, and your contract value moves with their performance. Net subaccount expenses range from 0.40% to 2.37% depending on which funds you choose, and those fund costs are separate from and on top of the contract's base charge. Nationwide also offers dollar-cost-averaging options — a 6-month DCA at 6.00% and a 12-month DCA at 3.00% (these enhanced DCA rates apply only to money waiting to be moved into subaccounts, not your whole balance).

The most meaningful secondary feature is the optional Nationwide Lifetime Income Rider+, available in Core XI, Accelerated XI, and Max XI versions. It is not built in — you choose to add it and pay for it — but it's what lets this product double as a future income vehicle. The benefit base grows at 8% simple interest for up to 10 years (or until you turn income on), which sets the figure your guaranteed lifetime withdrawals are calculated from. The current fee is 1.45% on the benefit base for the single-life option (1.50% maximum), or 1.60% for the joint option (1.90% maximum). The important caveat: that 8% is a roll-up on the income base used to calculate withdrawals, not a return on your actual account value. It only pays off if you actually turn the income on.

This is a 7-year commitment. You can withdraw up to 10% of total purchase payments each year without a surrender charge, and amounts above that during the surrender period are hit with the declining charge shown below. There is no market value adjustment, which is a genuine plus — your surrender cost is the stated percentage, not a figure that swings with interest rates. The contract also waives surrender charges for required minimum distributions, and includes long-term care (nursing home) and terminal illness surrender-charge waivers, though those two waivers are not available in California. Even with the 10% free withdrawal and the waivers, this is retirement money you're committing for the better part of a decade, not a fund you tap casually.

The base cost is 1.30% per year — a 1.10% mortality and expense (M&E) charge plus a 0.20% administrative charge — deducted from contract value. On top of that you pay each subaccount's own fund expense, which runs from 0.40% to 2.37%. So before any rider, a typical all-in cost can sit well above 2%. Add the Lifetime Income Rider+ at 1.45% (single life, current) and you're layering another charge on the benefit base. Optional enhanced death benefit riders — One-Year Enhanced (0.20%), One-Month Enhanced (0.35%), Combination Enhanced (0.65%), and Beneficiary Protector II (0.35%) — add still more. There's also a $30 annual contract fee, waived once contract value reaches $50,000 on a contract anniversary. The "premium credit" Nationwide advertises is modest and only kicks in at large cumulative household premiums — 0.50% at $500,000 and 1.00% at $1,000,000 and up — so most buyers won't see it at all. The honest trade here is that you're paying a full variable-annuity cost stack for tax deferral and optional guarantees, and that only makes sense if you genuinely want market participation rather than protection.

Legal Entity: Nationwide Life Insurance Company

Parent: Nationwide Mutual Insurance Company

AM Best Rating: A+