This fee is charged by the life insurance side to cover the cost of providing the “Personal Income Benefit.” For this benefit, you will pay 1% annually, based on the value of your Personal Income Benefit account. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. This review will help you do that. Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing. How about the Guaranteed Interest Option (GIO)? My own stupidity for not checking on that before I started investing. You may also want to consider the relative features, benefits, and costs against or with any other investment that you may use in connection with your retirement. AXA Equitable pays contribution-based and asset-based compensation to their agents. by krow36 » Tue Feb 14, 2017 7:38 pm, Post The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. ↳   The Bogleheads® Wiki: a collaborative work of the Bogleheads community, ↳   Local Chapters and Bogleheads Community. If the annuity doesn’t help move you toward your retirement goals, then it might not be the right choice for you. It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. There is no additional tax benefit to you when you buy this annuity inside a 403(b) or retirement plan. PlanConnect, LLC, (PlanConnect) provides recordkeeping and administration services for the 403(b)(7) group custodial account program. No match provided. Private Advisor Group and Warwick Valley Financial Advisors  are separate entities from LPL Financial. Vanguard direct does not use their Admiral class funds, only their Investor class, while Fidelity does use their Premier class index funds. AXA has entered into sub-advisory agreements with Fidelity, Goldman Sachs, Invesco, Ivy Funds, Lazard, MFS, Oppenheimer, PIMCO, Franklin Templeton and Van Eck. A variable annuity is a type of deferred annuity, so there are two phases to your contract: the growth phase, and the income phase. I had AXA at one time. If you currently own this annuity: Now may be a good time to take another look and evaluate this product in light of your long term goals. Be sure to read carefully the marketing materials and prospectus, and if you don’t understand what you’re paying for, ask questions and receive a full disclosure before making a decision. BrightHouse (in Administration) is the UK's largest rent-to-own lender. On the other hand, the annual fees on variable annuities usually start at 2% and vary up to 3%, according to FINRA. If you’re contributing the maximum 2018 amount of $18,500 to your plan and, if over 50, also taking advantage of $6,000 catch-up contributions, then AXA could be paying as much as $490 a year to your broker. The SEC’s Office of Investor Education and Advocacy has issued bulletins warning investors how much fees can impact the growth potential of a portfolio. Benefits: Once your Personal Income Benefit withdrawals start, they continue for as long as you (or you and your spouse) live, even if your Personal Income Benefit account value drops to zero. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. The school district name was in the pull down, they accepted the application and opened the account. If you own this annuity, or you’ve been pitched this by an agent/advisor and want an independent, objective review—then you’re in the right place. Mine is a series 200. What you may find with plans from Vanguard or Fidelity is an expectation that the district will cover some of the plan-related expenses. The Personal Income Benefit investment option is available to plan participants between the ages of 45 and 85. You lose 47% of your account value to fees! Warwick, NY 10990, Direct: 845-981-7300 As far as investment-specific fees go, the company states that investments in your Protected Benefit Account come with expenses that range from 0.98% to 2.46%. by merdock69 » Wed Oct 16, 2019 3:31 pm, Post (12b1). Does being more conservative inside this variable annuity mean you won’t lose money right before your retirement date? According to one analysis from the independent investment research company Morningstar, the most popular version of the AXA Equi-Vest annuity has total annual operating costs that can range from 1.81% to 2.63%. Thanks again for reading, and as always, if you have any questions or would like to have your retirement portfolio reviewed, don’t hesitate to reach out and schedule your no-obligation consultation. In fact, millions of people who save in 403(b) plans may be losing nearly $10 billion each year in excessive investment fees, according to a recent analysis by Aon, a retirement consultant. My goal is to make my review of annuities as impartial and objective as possible. Even if you do die, your account didn’t drop below your total contributions, so the death benefit guarantee did not provide any guarantee in this example. But you’re probably already getting this benefit. A variable annuity is the only type of annuity that charges the M&E fee. I have a Axa 403B I would like to track in quicken. This is on top of all the underlying expense fees. This would give people access to both Vanguard and Fidelity options, along with a bunch of others. Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. They also typically allow a 10% free withdrawal amount subject to federal income tax withdrawal restrictions. These are pretty standard features that typically come with most income riders sold on annuities, and you can get them for less cost. If I try to add Axa as a straight Brokerage account I can login, but the account is reported as "Unknown Type". by tchasteen » Mon Feb 13, 2017 7:17 am, Post The contract also offers death benefit protection and, as discussed earlier, it offers a Personal Income Benefit for an additional cost. If you have extra money to do 457 and 403b then go for it, but I'd start with Ohio 457 for each of you, fees will be lower than your current 403 be offering, hard to get any lower going forward. agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. The max they can charge is 1.34%. This creates ongoing compensation for your broker. Statistically speaking, the chances of meeting with an untimely death when the market is down AND when you’ve lost a portion of your contributions may be relatively low. The EQUI-VEST overview states: “There is risk of substantial loss of principal because you would But how much can you protect? Some people have suggested Fidelity as an option instead. Case in point: A class action lawsuit brought against Hartford Life on behalf of about 24,000 municipal employees in San Diego County and Los Angeles CA illustrates one potential outcome: The plaintiff’s lawyers asked Hartford Life during the discovery process how much in death benefits the company had paid in the 17 years that both the San Diego and Los Angeles plans had existed. A 403(b)(7) custodial account program that provides mutual fund investment options in response to a Request for Proposal (RFP). Investment Options:  AXA EQUI-VEST variable annuity offers a wide range of investment options inside this contract. You listened and absorbed as much as you could, but there is a chance that some of the facts were not fully understood during the sales process. Does that mean you get to earn higher returns? HOW AN AGENT MIGHT TRY TO SELL YOU THIS POLICY. Brokers generally receive an up-front commission when they sell a variable annuity. It offers Structured Investment Options (SIO) that enables you to invest for growth with some downside protection for a set period of time. [1], Income Rider Benefits: Personal Income Benefit. want a guarantee of principal, you should consider other investment options or products that provide 2000 A.M. Best Company, Inc. 20 Apr. BENEFITS & FEATURES AS ADVERTISED BY THE AXA EQUI-VEST ANNUITY: ADDITIONAL BENEFITS AND FEATURES OF THE AXA VARIABLE ANNUITY, Ask a Question or Schedule a Consultation, North American Securities Administrators Association, clicking on the prospectus link within this article, Podcast: Bruce McNutt and Ken Ford discuss 403b’s. The percentage can be as high as 7% and never less than 2.5%.”. Answer: We recommend always using a personal email address for your MPO account rather than a work email. Bonds are subject to market and interest rate risk if sold prior to maturity. This annuity also gives the agent commissions based on your contributions. If you know a teacher or someone who is thinking about an annuity and might benefit from this post, feel free to forward it on to them via email. A 403(b) plan, which is like a 401(k) for educators and non-profit employees, can help supplement your pension or other retirement savings. Whether the higher fees make sense for you will depend on your specific needs and situation. See if anyone currently using them will print off what their contract is. I was leaning towards a Vanguard IRA. Tax-deferred Growth: One of this annuity’s main advantages is that the investments inside this product give you tax-deferred growth. If you have an annuity or other financial product you’d like to see an in-depth review on just let me know, I’d be happy to take a stab at it. The problem is I've been looking for AXA's fees for the last hour and can't find any comprehensive information on management fees. Get familiar with the various types of fees so that you’ll know exactly what you’ll be charged by the AXA Equi-Vest variable annuity. Read prospectuses carefully before investing. This fee is pretty standard for annuity contracts of this nature. (All those extra fees with no value added!) None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial. So, then you might select a Target Date Allocation Portfolio. Here are some of the rider benefit fees: If you Buying this variable annuity or any annuity cannot give you double tax-deferral because there’s no such thing. You want to compare prices and features, and understand exactly what you’re buying. Withdrawal Requirements’’ located at the back of this form. The one rider I analyzed had a 1% fee and it locked in returns at the high-water mark. * The divergence highlights the need for a regular review of plan expenses, and the need for benchmarking against alternatives. The answer: $119. Read our full 403(b) vs 401(k) comparisonhere. Variable annuities are long term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. . Okay. For the younger investor in their 40s or 50s, paying the additional 1 percent for an income guarantee now may not make sense, especially when you consider that the income rider fee is assessed for the life of the policy. These are typically 403(b)s offered by insurance companies (AXA, VALIC, MetLife, etc. For many teachers, they have started saving for retirement inside of a Tax Sheltered Annuity (TSA). The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Once a contract owner selects a Personal Income BenefitSM, they will be limited to one of these five allocation models: AXA also gives you other options if you don’t want to pay the income rider fee. by krow36 » Fri Feb 10, 2017 9:09 pm, Post By contrast, the average investment fees for mutual funds inside a 401(k) retirement plan cost investors 0.88%, according to a 2015 BrightScope report. by KESP » Fri Feb 10, 2017 12:13 pm, Post I then received a letter from the school district plan administrator stating that vanguard was not an approved provider and they would not support salary reductions for the account. by Teacher88 » Tue Feb 14, 2017 9:55 am, Post AXA states in the prospectus: “. The average mutual fund fees and expense ratio is 1.02% a year, according to the Investment Company Institute. You basically lose all the returns you’ve gained. AXA also reminds you that you should buy this annuity based on its features and benefits, so let’s take a look at those. Hopefully that continues when we actually start with them. As I found out through researching AXA 403(b)’s, they are, in my opinion, one of the worst products on the market.  A variable annuity in a 403(b) does not give you any additional tax benefits. (Source: See Also: When 2% Costs Everything–How Investment Fees Cost You Your Freedom. The sales agent may also tell you that these investments all benefit from tax-deferred growth. When it comes between choosing between a 403b direct with Fidelity, direct with Vanguard or with Aspire self directed using either Vanguard or Fidelity, there is very little difference in costs. Maybe they bought you lunch in the teacher’s lounge and gave a short presentation about the basics of the 403(b) plan. This includes school systems, hospitals and healthcare systems, and religious organizations. [1] “Can Annuities Pass Muster?” The Free Library. There are no up-front fees, no back-end fees and some of … It locks in your account value at the high-water mark, which is a crediting method based on the highest level attained by the reference index over a given period of time. by merdock69 » Sun Oct 20, 2019 10:03 pm, Post On top of the expenses for the underlying funds, there is a .15% administrative fee, and a yearly fee of $40 I believe. Underlying Portfolio Operating Expenses: This is another ongoing fee charged for the investments inside of the variable annuity. *Standard and Poor’s Rating Service provides ratings which measure the claims-paying ability of an insurer. Says AXA: “No more than 25% of any contribution can be allocated to the GIO.”. This creates ongoing compensation for your broker. Although Aspire adds the 0.15% fee to Vanguard’s and Fidelity’s expense ratios, Aspire is able to use both VG’s Admiral class index funds as well as Fidelity’s Premier class. A 403(b)(7) custodial account program provides mutual fund investment options to 403(b) plan participants. If you are like many school district employees, there is a good chance you are using a 403(b) plan as a way to supplement your pension in order to build a healthier retirement. by tchasteen » Fri Feb 10, 2017 11:14 am, Post The death benefit is often sold as a way to guarantee that even if the market goes down and your contract loses money, a death benefit would still be paid. Notes on Fee Calculations Assumes a 6% market return and a 3% inflation rate. You’re paying for it with the M&E fee we talked about earlier. Teachers: Is the Death Benefit Killing Your Retirement Plan? If you have a 403(b) plan, then you’re already getting tax-deferred growth. For readers who have found my website and don’t know much about me, I am a fee-only financial planner held to the Fiduciary Standard. Selling annuities also creates a continuing income stream for the brokers. Overall fees including a Mortality and Expense Risk charge, Surrender Charges based on ongoing contributions, Agent commissions and compensation based on ongoing contributions, Income rider features that limit investment options for a lifetime fee, Annuitization of the contract may be required, No additional tax benefits when part of a 403(b). This independent review will cover the following information on the AXA Equi-Vest Annuity: How will this AXA annuity product review help you? I don’t think small differences of about 0.05% make a significant difference unless you are dealing with very large accounts. A fee charged to facilitate transactions between buyers and sellers. I have no idea why this seems to be such a big deal because in every case, if you need an annuity, you are better off getting one from anyone but these providers. ... lator.aspx,, ... .html?_r=1,,, ... -platform/, ... =NA&d=1512,, $25 per participant per year for ongoing enrollment plus, $12 per year for recordkeeping ($3 per participant per quarter) plus, 0.50% charges on all assets (0.49% program & 0.01% other), EQ/Equity 500 Index (0.36 + 0.50 = 0.86%) -- Large caps, 80% of US stocks, EQ/Small Company Index (0.37 + 0.50 = 0.87%) -- Small caps, 14% of US stocks, EQ/MFS International Growth (0.98 + 0.50 = 1.48%) -- International stocks, expensive, EQ/Core Bond Index (0.46 + 0.50 = 0.96%) -- US bonds, EQ/Equity 500 Index (.58% + 1.20% = 1.78%) -- Large caps, 80% of US stocks, EQ/Small Company Index (.64% + 1.20% = 1.84%) -- Small caps, 14% of US stocks, Russell 200 Index, EQ/Common Stock Index Portfolio (.70% + 1.20% = 1.90%) -- 98% of the investable U.S. equity market, EQ/Mid Cap Index Portfolio (.72% + 1.20% = 1.92%) -- S&P MidCap 400 Index, EQ/Core Bond Index (0.67% + 1.20% = 1.87%) -- US bonds, EQ/Intermediate Government Bond Portfolio (0.64% + 1.20% = 1.84%) -- US Government Bonds, EQ/International Equity Index Portfolio (0.81% + 1.20% = 2.01%) -- International stocks, most expensive of the "lowest cost" options, EQ/Short Term Bond Portfolio (0.81% + 1.20% = 2.01%) --. to have my pretax dollars from my income invested in a retirement -403b The rep never disclosed any information about having to stay with the company for 6 years even if i ended employment, turned 60 or just wanted to transfer my funds to another financial institution's 403B. The 403(b) platform offers over 90 in-vestment options and 34 different money managers. pensation from AXA, the lergy Advantage 403(b) Plan provider in the amount of .25% of every $100 in the plan annually. A 403(b) is a retirement plan provided by employers in nonprofit organizations. I was signed up with AXA at a school professional development meeting. The prospectus and, if available, the summary prospectus contains this and other important information about the variable annuity contract and sub-accounts. such guarantees.”. by krow36 » Mon Feb 13, 2017 10:12 pm, Post tchasteen- honestly, I wasn't even aware Vanguard waived the $15/fund. Features: The amount of your income withdrawals under this feature will never decrease—unless of course you make early or excessive withdrawals as specified by the contract. It’s a perk that comes with the plan. Learn facts/information you need to know about one of the most popular products being. This is a good thing. 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