Goldstein Complexity Index — Grading Annuities on Buyer Confusion
Quick take: The Goldstein Complexity Index is my 5-dimension scorecard for every annuity I review. Score range: 8 (simple, transparent) to 100 (maximum complexity, max trap potential). Higher = WORSE. Below: the 5 dimensions, the math, and the grading scale that shows up on every review page on this site.
Why complexity matters
Complexity is where buyers get burned:
- Confusing riders → buyers don't understand the fees
- Hidden fee structures → buyers don't see the math
- Surrender penalties that surprise → buyers don't realize the lockup until they try to exit
- Separate "benefit bases" → buyers think they have more cash than they do
The simpler the product, the harder it is to mis-sell.
SPIAs and MYGAs are simple. They score 8-15 on the index.
Income-rider FIAs with bonuses + multiple crediting strategies score 60-90.
Every review on this site includes the Goldstein Complexity Index score.
The 5 dimensions (1-10 each)
Dimension 1: Riders (1-10)
Number of optional or required riders attached to the product.
- 1 = no riders (SPIA life-only, basic MYGA)
- 3 = one optional rider (FIA with optional death benefit)
- 6 = multiple optional riders (FIA with income + death + LTC riders)
- 9 = built-in rider plus options (Allianz 222 has built-in income rider PLUS optional accelerated income)
Why more is worse: Each rider adds fees + complexity + potential mis-selling opportunity.
Dimension 2: Crediting Strategies (1-10)
Number of index-linked crediting strategies available.
- 1 = no crediting (MYGA pays fixed rate)
- 3 = one strategy (FIA with single S&P 500 cap)
- 6 = multiple strategies (FIA with cap + spread + participation rate options)
- 9 = proprietary index w/ multiple variations (Nationwide New Heights with 4 proprietary index variations)
Why more is worse: Buyers can't compare apples-to-apples across carriers when strategies differ.
Dimension 3: Surrender Complexity (1-10)
Surrender period length + MVA + bonus recapture interaction.
- 1 = no surrender (already-annuitized SPIA)
- 3 = short surrender, no MVA (3-yr MYGA, simple)
- 5 = 7-10 yr surrender + MVA (standard FIA)
- 7 = 10-yr + MVA + bonus vesting (bonus FIA)
- 9 = 14-yr + MVA + bonus recapture + step-down (long-surrender bonus FIA)
Why more is worse: Compound surrender penalties + MVA + bonus interactions create math that even sophisticated buyers don't fully understand.
Dimension 4: Benefit-Base Separation (1-10)
Whether the product has a separate "benefit base" or "income base" that LOOKS like money but isn't.
- 1 = no separation (MYGA, SPIA — what you see is what you get)
- 5 = benefit base on optional rider (Athene Performance Elite + rider)
- 9 = benefit base is the headline number (Allianz 222 PIV — agents show $640K benefit base, not $337K account value)
- 10 = PIV + step-up + market interactions (Maximum confusion)
Why this matters: This is the SINGLE BIGGEST source of buyer confusion in the industry. Agents show big benefit base numbers; buyers think they have that much cash. They don't.
Dimension 5: Bonus Vesting (1-10)
Premium bonus structure + vesting schedule complexity.
- 1 = no bonus (most MYGAs)
- 3 = small bonus, immediate vesting (rare)
- 5 = 5-7% bonus, vests over surrender (standard bonus FIA)
- 7 = 10-15% bonus, complex vesting + recapture (EquiTrust MarketPower, NWL Ultra Future)
Why more is worse: Bonus vesting interacts with surrender charges. If you exit early, you forfeit unvested bonus on top of surrender charge. Stacking penalty.
The composite score (8-100)
| Sum of 5 dimensions | Score | Grade |
|---|---|---|
| 5-12 | 8-20 | A+ (Transparent) |
| 13-20 | 21-35 | A (Simple) |
| 21-28 | 36-50 | B (Moderate) |
| 29-36 | 51-70 | C (Complex) |
| 37-44 | 71-85 | D (Very Complex) |
| 45-50 | 86-100 | F (Trap potential) |
Lower score = better. Higher score = more potential for buyer confusion + mis-selling.
Sample scores
Tier A+ (8-20) — Simplest products
- Aspida WealthLock 5 MYGA — Score 8 (A+)
- Athene SPIA life-only — Score 10 (A+)
- Penn Mutual Diversified MYGA — Score 10 (A+)
Tier A (21-35) — Simple FIAs
- Athene Performance Elite 10 (no rider) — Score 32 (A)
- Symetra Edge 10 — Score 32 (A)
- F&G Power Accumulator 10 — Score 32 (A)
Tier B (36-50) — Moderate complexity
- Athene Ascent Pro Bonus 10 — Score 44 (B) — bonus + cap structure
- Nationwide New Heights 7 — Score 42 (B) — proprietary indices
Tier C (51-70) — Complex products
- Delaware Life Power Select Plus Bonus — Score 56 (C) — bonus + 10-yr lock + accumulation choices
- North American Charter Plus — Score 56 (C) — income rider + benefit base
Tier D (71-85) — Very complex
- Allianz 222 with PIV — Score 74 (D) — PIV + 30% bonus + 7% rollup + 1.05% rider fee
- Allianz Benefit Control — Score 72 (D) — mode-switching + multiple riders
Tier F (86-100) — Maximum trap potential
- F&G Prosperity Elite 14 Enhancement — Score 88 (F) — 8% bonus + 14-yr lock + multiple riders
- EquiTrust MarketPower 14 — Score 92 (F) — 14% bonus + 14-yr lock + B++ carrier
How to use the Goldstein Complexity Index
Before buying ANY annuity:
- Check the score on the relevant review page
- Read the breakdown of the 5 dimensions
- Compare to alternatives at the same product-type level
- Score above 50? Get a second opinion. The complexity often hides traps.
When comparing two products:
If Product A scores 32 and Product B scores 64 — and both deliver similar economics — choose A. Lower complexity = fewer surprises.
When agents push high-complexity products:
Commissions scale with complexity. A simple MYGA pays 1-3% commission. A complex bonus + income-rider FIA pays 7-10%. If your agent is heavily pushing the highest-complexity option, ask why.
What complexity DOESN'T capture
The index measures product structure, not:
- Carrier financial strength (separate AM Best rating)
- Renewal rate integrity (separate grade)
- Customer service quality (separate J.D. Power data)
- Suitability for your specific situation
A simple product from a B+ carrier may still be wrong for you. A complex product from an A+ carrier may still fit. Complexity is one input — not the only one.
The principles behind the index
- Simpler is usually better — for buyers, not always for carriers
- Complexity gets monetized — higher commissions, hidden fees
- Buyers can't compare what they don't understand — and that's the carrier's edge
- An independent producer's job — translate complexity into plain English
📞 213-414-2808 for an independent Complexity Index analysis of any annuity proposal you've received. Hans walks through all 5 dimensions + flags the traps.
Related reading
- Most Confusing Parts of Annuity Contracts
- Rollup vs Account Value Misconceptions
- Income Rider Fee vs Payout Math
- FIA Pros and Cons Honest
- 20 Questions to Ask Your Annuity Agent
🧮 Goldstein Complexity Index
A core part of every Goldstein review. The more complex an annuity, the worse the rating in this dimension — because complexity is where buyers get burned (confusing riders, fee structures hidden in plain sight, surrender penalties that surprise people, separate "benefit bases" they thought were cash). Simple products (SPIAs, MYGAs) score low; products with stacked bonuses + income riders + MVA + multiple crediting strategies score high.
This product's score: 8/100 — Grade A+ (Transparent)
Easy to understand. Few moving parts. The buyer can fully explain the product to a friend after one read of the contract.
Score breakdown
| Dimension | Score (1–10) | What this measures |
|---|---|---|
| Riders | 1/10 | Number of optional/required riders (income, death benefit, LTC, etc.). More riders = more fees + more confusion. |
| Crediting strategies | 1/10 | Number of index-linked strategies (cap, spread, participation rate, step rate, volatility-controlled indices). More options = harder to understand. |
| Surrender complexity | 1/10 | Length of surrender period + MVA + bonus recapture interaction. Longer + MVA + recapture = more confusion. |
| Benefit-base separation | 1/10 | If the product has a separate "PIV" or income-base that is NOT cash but feels like cash. This is the single biggest source of buyer confusion in the industry. |
| Bonus structure | 1/10 | Premium bonus with recapture schedule. The bonus is real, but the recapture is complex. |
How to read this
- A+/A (0–40): You can understand what you bought. Pure accumulation FIA, MYGA, or SPIA. Low risk of mis-selling.
- B (41–60): You need to read the contract carefully and have a second-opinion review before signing. Income riders add the most confusion.
- C (61–80): Many buyers don't fully understand what they own. Common mis-selling: "bonus" sold as cash, "benefit base" sold as account value, surrender charges undisclosed.
- D (81–100): Demands an independent producer second opinion before signing. The product may still be right for you — but the chance you'll later say "I didn't know it worked that way" is very high.
Why complexity matters more than people think: Carriers don't get sued for complexity. Agents don't get sued for it either (in most states). But buyers regret it constantly. The annuity that wins your money in year one and confuses you for the next 14 is worse than a simpler product that you understood perfectly. Simple ≠ inferior. Simple = audit-able.
Explain it like I'm 12 — quick summary
Annuities are insurance contracts that exchange a premium (lump sum or installments) for one of three benefit structures:
- Lifetime income (SPIA — pay once, get monthly checks for life)
- Tax-deferred growth with downside protection (FIA — market-linked credits with caps + 0% floor)
- Fixed rate over a term (MYGA — like a CD on steroids)
The carrier funds these benefits through bond portfolio yields + (for FIAs) option budgets used to buy market-linked credits.
The trade-off across all annuity products: certainty in exchange for liquidity and growth potential. SPIA = max certainty (income guaranteed for life) at cost of principal access. FIA = downside protection at cost of growth ceiling. MYGA = rate certainty at cost of term lock-up.
Quick FAQ
Q: Are annuities ever "good investments"?
A: Yes — when used for the specific purpose of income certainty, downside protection, or rate certainty. Bad when forced into a hybrid agenda (e.g., SPIA sold for "growth").
Q: What's the difference between immediate and deferred annuities?
A: Immediate (SPIA) = income starts within 12 months of purchase. Deferred = income or accumulation over years before payouts begin.
Q: Who regulates annuities?
A: State insurance commissioners. (RILAs are also FINRA-regulated as securities.)
Q: What's the state guaranty fund limit?
A: Typically $250,000-$300,000 per owner per carrier (varies by state). Split large purchases across multiple carriers to stay within coverage on each half.
Q: How do I compare annuities side-by-side?
A: Look at: carrier rating (AM Best, S&P, Moody's, Fitch, Weiss, KBRA composite), Goldstein Complexity Index, renewal-rate integrity, customer service, and the specific structure for YOUR use case.
Q: When should I get a second opinion?
A: Before signing any annuity over $50,000. Independent review costs nothing and can save thousands.
📩 Get a second opinion before you sign — this is a big decision
Talk to a licensed independent expert. Hans.
Fixed indexed annuities are committed for 7-15 years. Cap rates renew annually and can drop. Income riders have separate benefit bases that aren't cash. Get an independent review before you commit your retirement savings to a multi-year contract.
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📞 Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
This review reflects publicly available product materials and approximate rates as of the date stated above. Annuity rates, caps, participation rates, payout factors, crediting methods, and long-term care benefit structures change frequently — typically monthly. Always confirm current values against the most recent carrier disclosure document and the actual contract before purchasing. This article is general information for educational purposes; it is not a personalized recommendation, solicitation, or offer of any specific product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers across the annuity and long-term care insurance market; the producer's specific appointment status with the carrier discussed in this review may vary, and this review is not an endorsement or representation of carrier appointment. No compensation has been received from any carrier in connection with the publication of this review. Always read the actual contract and consult a licensed advisor before purchasing any annuity or long-term care insurance product. Past index performance does not predict future credited interest. Annuities and hybrid life+LTC policies are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. AM Best ratings and tax treatment are subject to change. Tax discussion of IRC §7702B, §1035, and the Pension Protection Act of 2006 reflects law as of 2026 and is subject to change.