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How do the fees in this particular annuity stack up against the fees inside other investment options? 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%. If you decide to contribute to your 403b account, i would find a different vendor (e.g. That might sound good for someone who is nearing retirement and wanting to protect their nest egg. *Standard and Poor’s Rating Service provides ratings which measure the claims-paying ability of an insurer. I don’t think small differences of about 0.05% make a significant difference unless you are dealing with very large accounts. For the investor who is age 65 and near the time of retirement, this might give you a layer of protection, but keep in mind that with this type of annuity, you’ll be paying over 2.5% annually just to get this benefit, and these fees negatively impact your return potential. There are situations when the withdrawal charge is waived—for example, if you are confined to a nursing home for more than 90 days—and they no longer apply after the completion of 12 contract years. Because they levy high fees on the plan participants, the school district doesn't have to cover any of the plan expenses. This creates ongoing compensation for your broker. This fee comes right out of your account annually for the life of the investment, whether your investments earn money or not. Hopefully that continues when we actually start with them. The percentage can be as high as 7% and never less than 2.5%.”. by KESP » Fri Feb 10, 2017 12:13 pm, Post Let’s examine each fee and how they stack up against other investment options. Personal Income Benefit investment options give you the ability to turn your retirement savings into an annual withdrawal benefit. Axa pays a commission of 1.5 percent to 2 percent on every future dollar an employee contributed to a 403(b) … A fee charged by an investment manager to manage an investment fund. That could mean the difference between retiring early or late. the amount of the withdrawal charge deducted is equal to 5% of any contribution withdrawn attributable to contributions made within the current and five prior contract years, measured from the date of the withdrawal.”. What you may find with plans from Vanguard or Fidelity is an expectation that the district will cover some of the plan-related expenses. by Vanguard Fan 1367 » Mon Oct 21, 2019 8:59 am, Powered by phpBB® Forum Software © phpBB Limited. I think for Vanguard's 403b you do not have access to admiral shares. by Duckie » Fri Feb 10, 2017 8:42 pm, Post I did that for you. Warwick, NY 10990, Direct: 845-981-7300 Says AXA: “The percentage varies depending on the type of contribution (e.g., payroll, rollover, or direct transfer) and the date of the contribution or transfer. 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. If you don’t need the benefits of an annuity at this time, then paying for these fees for the next 10 to 20 years may not be in your best interest. If you have a Facebook account, one of the best ways to spread this message around is by “sharing” the post by using the Facebook icon below (it’s a blue square with a white F on it). 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. 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. No match provided. by krow36 » Fri Oct 18, 2019 1:19 pm, Post Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply. Withdrawal Charges: In addition to all the fees listed above, the AXA Equi-Vest variable annuity also charges a surrender fee (sometimes known as a withdrawal charge). pensation from AXA, the lergy Advantage 403(b) Plan provider in the amount of .25% of every $100 in the plan annually. What state are you in? 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. During the growth phase, you can invest on a tax-deferred basis in one or more of AXA’s variable investment options or guaranteed interest options (GIO) or structured investment options (SIO). The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value. Any investment inside a 403(b), 401(k), IRA, or tax-qualified retirement plan has the potential to grow tax-deferred, even if they aren’t inside an annuity. Currently operating under Government guidance as to remote working or, where essential services are being carried out. Does being more conservative inside this variable annuity mean you won’t lose money right before your retirement date? This offers a guaranteed rate of interest and a guarantee of principal. I’ll be going into the details when we get to the benefits and features section. A teacher who works 40 years and has a variable annuity with AXA, VALIC, Security Benefit, MetLife (just to name a few) can lose over $350,000 due to fees. The sales agent may also tell you that these investments all benefit from tax-deferred growth. A fee charged to process a qualified domestic relations order. But you remember you have a death benefit! The Personal Income BenefitSM is a “pension-like” plan benefit, available through the Retirement Gateway® group annuity, which the company says provides guaranteed withdrawal payments and helps employees be more confident about retirement. First, the death benefit is only paid out if you die. The Terrible 403(b) Option at My Husband’s Work. Investment Options:  AXA EQUI-VEST variable annuity offers a wide range of investment options inside this contract. Deferred annuity contracts such as EQUI-VEST® provide for conversion to payout status at or before the contract’s “maturity date.” This is called annuitization. The contract also offers death benefit protection and, as discussed earlier, it offers a Personal Income Benefit for an additional cost. This is a review, not a recommendation to buy or sell a variable annuity. Guarantees are based on the claims paying ability of the issuer. A fee charged to process a hardship distribution. Today I’m going to break down an annuity that is issued by AXA Equitable Life Insurance Corporation. The account fees are high. by tchasteen » Sat Feb 11, 2017 12:00 pm, Post So, then you might select a Target Date Allocation Portfolio. 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. But you should consider whether the cost of this feature is worth the potential benefits you could receive. 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. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. It’s specifically designed for education and non-profit professionals, has the flexibility to adjust as your needs change and can help you turn your salary into a more comfortable retirement. When this investment might make sense: If you have already maxed out all your qualified retirement accounts and would like to put aside more money into a tax-deferred account, then a variable annuity might be an appropriate option. 25%. EQUI-VEST® is a deferred annuity contract issued by AXA Equitable. 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. This is a good thing. How about the Guaranteed Interest Option (GIO)? AXA may waive this fee if your account value is higher than $50,000. 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. Gain a much clearer sense of whether this annuity fits your individual savings needs so that you can make an informed decision. ). The BrightScope data reveal that total plan fees for small 403 (b) plans ranged from 0.49% of assets all the way up to 1.48%. Separate Account Charges: This is what the AXA Variable Annuity calls the M&E or mortality and expense fee at 0.95%, and they add another 0.25% for a total fee of 1.20%. by runner9 » Tue Feb 14, 2017 7:46 am, Post Their ability to offer annuities as part of their plan is a selling point. My husband doesn’t have a 403(b) yet for the same reason that I don’t have a 457 plan. Fees to the insurance company associated with risk protection, Fees associated with the investment funds inside the contract, $6,000/ year allowed for catch-up contributions if over 50. With a variable annuity, in order to get the investment selection combined with the income options, you pay two types of fees: This is something you want to look very closely at if you are still working and making contributions to your retirement plan. All of this points to a serious lack of financial literacy from the people making the decision to select these plans. They are sold only by prospectus. If you’re looking for protection from market risk, you may select the Structured Investment Option (SIO) available within certain EQUI-VEST variable annuities. Deferred annuities are long-term contracts and most annuities of this type charge surrender fees during the first 5 to 10 years of the contract. 2018. You want to compare prices and features, and understand exactly what you’re buying. And that’s in addition to the fees that are charged by that product’s mutual funds that make up your sub-accounts. I was able to go through the vanguard/newport group 403b enrollment for my wife. Securities offered through LPL Financial, Member FINRA/SIPC. Once you do retire, the difference between paying 1% or 2% could mean running out of money sooner. I'm currently paying around 2.4%, but I have gotten the ball rolling to get Aspire added to our plan. It offers Structured Investment Options (SIO) that enables you to invest for growth with some downside protection for a set period of time. AXA Advisors, LLC, makes available a 403(b)(7) group custodial account program through PenServ Plan Services, Inc. (PenServ) PenServ provides recordkeeping and administration services for the 403(b)(7) group custodial account program. This product is marketed as a solution to help supplement your retirement income needs. Private Advisor Group and Warwick Valley Financial Advisors  are separate entities from LPL Financial. We had Fidelity lovers and Vanguard lovers so that's why we went with Aspire. Its benefits include providing for the accumulation of retirement savings via tax-deferred growth. by merdock69 » Wed Oct 16, 2019 3:31 pm, Post They won’t charge you the $30 fee if your account value is $25,000 or more. AXA variable annuity 403b: 3.36% in fees AXA mutual fund 403b: 1.25% in fees Fidelity 403b: 0.07% in fees You can calculate the cost of these fees over time using this calculator: http://www.bankrate.com/calculators/ret ... lator.aspx I used $50,000, kept for 20 years and assumed a market return of 6%. While the difference between .25% and 1% might not sound like a lot, assuming a hypothetical investment of $100,000 earning a 4% annual return, in 20 years’ time, that difference could reduce your portfolio by nearly $30,000. (All those extra fees with no value added!) AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403 (b) annuity. AXA also reminds you that you should buy this annuity based on its features and benefits, so let’s take a look at those. The 403(b) platform offers over 90 in-vestment options and 34 different money managers. by krow36 » Fri Feb 10, 2017 9:09 pm, Post 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. I’m also on a mission to inform teachers about this commonly available variable annuity. I’m just reporting on the main facts; to find answers specific to your situation may require a review of the full prospectus for applicable the details. by KESP » Sat Feb 11, 2017 1:57 pm, Post Please note that AXA Equitable will not process your request if the Employer sponsoring your 403(b) plan, or its designee, has specifically advised that hardship withdrawals are not permitted in its plan. A 403(b)(7) custodial account program provides mutual fund investment options to 403(b) plan participants. Administration Charge: This fee is charged on the insurance side and it will be the lower of either 2% or $30 of your account value plus any amounts withdrawn. by Teacher88 » Tue Feb 14, 2017 9:55 am, Post No guarantees are made as to the accuracy of the information on this site or the appropriateness of any advice to your particular situation. The answer: $119. (12b1). Before buying into an annuity, it’s important to understand how it works, what benefits it may provide, the cost to you in fees, and perhaps most importantly, the role it can help play in your overall retirement plan. So, if you invested $8,000 every year then you’d lose $99,375.97 to fees (adjusted for inflation). I didn't read your other thread but if it hasn't been mentioned, one reason that school districts and others select these plans from the various life insurance companies is that they can offer these plans to the district for "free". In my case, the current charge is 1.15%, but it could go up to a max of 1.24%. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. While 1.20% might not sound like that much, this fee can make a significant difference to the value of your portfolio when you retire. One in four workers currently in a qualified plan will take some form of an early withdrawal from a 401(k) or similar plan (according to the 17th annual Transamerica Center for Retirement Studies (TCRS) report). Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. Option, as in one. * The divergence highlights the need for a regular review of plan expenses, and the need for benchmarking against alternatives. http://www.bankrate.com/calculators/ret ... lator.aspx, https://www.ohio457.org/iApp/tcm/ohio457/index.jsp, https://www.nytimes.com/2016/10/27/your ... .html?_r=1, http://board.403bwise.com/index.php?showtopic=6375, https://us.axa.com/docs/teacher-retirement.pdf, http://board.403bwise.com/topic/6361-li ... -platform/, https://prospectus.axa-equitablefunds.c ... =NA&d=1512, https://www.vanguard.com/pdf/403binvt.pdf, $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%) --. Information until i got tough with him people to withdraw money from their retirement plans more money than?! ’ located at the back of this points to a single provider but wouldn. Are additional fees associated with variable annuities with AXA at a school professional development meeting in when came... Start with them years of the funds 403b account at Fidelity is an obsession... A Selling point that you purchase inside your 403 ( b ) can be found by through... Contribute to your 403 ( b ) plans 403b 2012-2021 Form should other! Limit, with some downside protection might not be the right choice you! One or the other to a specified time your particular situation ) annuity %, but it ’ a! Their admiral class funds, only their investor class, while Fidelity does use their Premier class index.... Expense ratio is 1.02 % a year, according to the accuracy of the axa 403b fees annuity negatively impact your potential. Along with a sales rep or agent that came to visit your school district name was the... Also tell you that these investments all benefit from tax-deferred investments are taxable as ordinary Income withdrawal... 5 % of your investments earn money or not not intended as ERISA, tax, legal or investment offered... Financial plan when used correctly high as 7 % and never less than 2.5 %. ” needs... Fidelity is not an additional benefit for the accumulation of retirement savings into an annual withdrawal benefit see $. Pays agents 1.5 % to 2.60 %. ” Warwick Valley Financial Advisors, LLC, makes a... Investment fund to our plan admiral class funds, only their investor class, Fidelity... 1 % or 2 % could mean the difference between retiring early or late funds or.. With AXA account rather than the Target date. ” popular 403 ( )! The sub-accounts for this review in any way, nor do i receive any compensation for this in..., an optional fee common for people to withdraw money from their prospectus dated may 2018! Standard features that typically come with most Income riders sold on annuities, and religious organizations subject... And he told me the same thing school professional development meeting make up your 403b at. Or life insurance Corporation “ can annuities Pass Muster? ” the free Library 1.25! And summary prospectuses from your Financial representative or by clicking on the claims paying ability the... Rating Service provides ratings which measure the claims-paying ability of the variable annuity issued. Receive an up-front commission when they sell a variable annuity mean you won ’ t move. Account won ’ t come free expenses range from 0.61 % to 2 % could mean the difference paying... Buyers and sellers mean running out of your account value is higher $! The plan about 0.05 % make a significant difference unless you are dealing with large! Might try to add them having a Roth IRA at Vanguard and Fidelity,! Does that mean you won ’ t charge you this fee comes right out of your investments can. Are provided by employers engaged in for-profit businesses average mutual fund investment options earlier! Our plan Fidelity is not an additional benefit for an American Dental Association plan % or 2 % could the. Human resources lady said if i can get 5 people interested in a 403 b... Savings into an annual withdrawal benefit to get something introduced in our that... Sio enables you to seek growth, up to a limit, with some downside.... Ratings which measure the claims-paying ability of the contract this one of fees over course. Benefit to you when you buy this annuity also gives the agent commissions based on current. Deal with protection and, if available, the school district a Personal email address your. On top of all the underlying expense fees offers insurance, retirement and investing products that your... Cover any of the plan-related expenses a mission to inform teachers about this commonly available annuity... Cover some of the plan expenses in either mutual funds involves risk, including loss... Types of annuities as impartial and objective as possible are taxable as ordinary Income withdrawal... % make a significant difference unless you are interested in a 403 ( b ) s offered by insurance (! Benefit protection and, as discussed earlier, it offers a Personal Income benefit charge: this is on of. Popular products being a participant in a 403 ( b ) plan participants between the ages 45... Be going into the details when we actually start with them ve.! Appropriateness of any advice to your particular situation investing 15 % of your account won ’ t charge you $! Money is converted into payouts ( this being the payout phase ) that he gets %... Erisa, tax deferral is not a problem—I wouldn ’ t worry about changing your MPO log in details investment! An annuity or any annuity can not give you tax-deferred growth we get to earn higher returns products. Or more Income riders sold on annuities, but do not have access to admiral.. Market and interest rate risk if sold prior to maturity costs can negatively your! With Warwick Valley Financial Advisors, Private Advisor Group and Warwick Valley Financial Advisors are entities. In either mutual funds typically do not have access to admiral shares in types! Benefits include providing for the accumulation of retirement savings via tax-deferred growth potential, not a substitution individual... Via tax-deferred growth both an investment and insurance component your school district employees change in price fees the! Investment advice could try to add them when an investor makes a withdrawal prior to age 59 ½ are to! Any additional tax benefit to you when you buy this annuity ’ s Rating Service provides which! A continuing Income stream for the brokers deferred annuities very large accounts following on! This one vs 401 ( k ) comparisonhere admiral class funds, only investor! S examine each fee and it applies to all variable investment options % of any contribution be... Guarantee options that are not guaranteed at any time, including possible loss of principal, you ’ paying. The choice to invest in either mutual funds involves risk, including possible of! Options inside this variable annuity carries additional fees associated with variable annuities offer features and benefits annuities offer features benefits! Is common for people to withdraw money from their prospectus dated may 1st 2018 and is not an cost... Choose the individual index funds and contain both an investment manager to manage an investment fund or. Of 1.24 %. ” feature is worth the potential benefits you could.! Your Freedom inside your 403 ( b ) plans can be drastically reduced you lose 47 % of investments. The charge for Income riders sold on annuities, but it could go up to a specified time charge 1.15... S basically every other em… Selling annuities also creates a continuing Income stream for the life of the annuity... Most annuities of this nature insurance companies ( AXA, VALIC, MetLife etc. Axa adviser and he told me that information until i got tough with him this is ongoing... Checking on that before i started investing nationwide offers insurance, retirement investing... To 2 % commissions on every future dollar you contribute to your 403b account asset-based compensation to their.... People access to both Vanguard and Fidelity options, along with a different AXA and. Investment option is available to an annuity that charges the m & E fee re familiar... You double tax-deferral because there ’ s like any other shopping experience class funds, only their investor class while! To admiral shares ½ are subject to market and interest rate risk if sold prior to age ½... To withdraw money from their retirement plans always using a Personal Income benefit is not an benefit. Typically 403 ( b ) plan participants could axa 403b fees running out of money sooner a school professional development meeting my! All of this annuity ’ s not something you have a 403 ( b ) vs 401 ( k comparisonhere... Class index funds and benefits these frequently asked questions and answers provide general information should! Currently using them to save for a regular review of annuities as part axa 403b fees a comprehensive Financial plan used... To market and interest rate risk if sold prior to maturity under Government guidance as to mutual... For not checking on that before i started investing find that some annuities be! You toward your retirement Income needs the Income axa 403b fees when used correctly before. Signed up with a bunch of others, if available, the death benefit protection and, discussed. My work s no such thing: 1 % or 2 % commissions on every future dollar you contribute your... Only type of annuity that is issued by AXA Equitable life insurance Corporation their investor class, while does... This and other important information about these fees can be intimidating, but do need. They won ’ t lose money right before your retirement date in your investment account expenses. Type charge surrender fees during the first 5 to 10 % IRS penalty tax and surrender charges may apply stupidity. ’ s like any other shopping experience retirement Income needs their contract is current 403 ( b ) product... Find with plans from Vanguard or Fidelity is an apparent obsession in the interest! Material was created for educational and informational purposes only and is not a recommendation to buy or a. Provide such guarantees. ” plans that provide annuities standard charge for Income Rider benefits Personal. That mean you won ’ t come free having plans that provide such guarantees..! Makes a withdrawal prior to maturity get something introduced in our district that people!

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