This independent review will cover the following information on the AXA Equi-Vest Annuity: How will this AXA annuity product review help you? Wrong. Over time, higher fees can negatively impact your return potential. Its benefits include providing for the accumulation of retirement savings via tax-deferred growth. *An annual asset-based fee will apply as well as the internal expenses and fees of the underlying funds. Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. If the annuity doesn’t help move you toward your retirement goals, then it might not be the right choice for you. No matter where you are today, everyone starts somewhere. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Your VALIC plan - even using the lowest cost fund of 1.1% - would start to go beyond that typical 401k or 403b plan $40 annual expense fee that many plans charge once your balance reached $3700. I have saved It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. This is a good thing. Teachers: Is the Death Benefit Killing Your Retirement Plan? There are situations when the withdrawal charge is waived—for example, if you are confined to a nursing home for more than 90 days—and they no longer apply after the completion of 12 contract years. When this investment might make sense: If you have already maxed out all your qualified retirement accounts and would like to put aside more money into a tax-deferred account, then a variable annuity might be an appropriate option. Contribution cannot be more than annual salary ($). This creates ongoing compensation for your broker. The target date is the approximate date when investors plan to start withdrawing their money. Okay. Competitive "All-In" Fee for Members Retirement Program Plans. This creates ongoing compensation for your broker. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. Buying this variable annuity or any annuity cannot give you double tax-deferral because there’s no such thing. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply. This annuity also gives the agent commissions based on your contributions. Please replace any bookmarks with www.equitable.com. 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. But how good is the protection? Workplace retirement savings plans can be a smart and effective way to build wealth now that may be your income in retirement. Today I’m going to break down an annuity that is issued by AXA Equitable Life Insurance Corporation. A 403(b) plan is a high-visibility benefit that can help employees save for their retirement and enhance your value as an employer. Guaranteed income and supplemental retirement investments — Annuities and IRAs may help provide greater financial security, protect your savings, and enable you to confidently save for a fulfilling future. Mailing Instructions: Express Mail: (with money): JPMorganChase 4 Chase Metrotech Center, 7th Floor . 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. 2018. For such cases, tax deferral is not an additional benefit for the annuity.”. universal life, Variable The benchmarks were created by analyzing the account balances and contribution levels from EBRI’s Retirement Security Projection What if you know you need more money than that? month Maximum yearly contribution is $19,500 for people aged 49 and under. Regular Mail: (with money): Whether the higher fees make sense for you will depend on your specific needs and situation. Learn facts/information you need to know about one of the most popular products being. The sales agent may also tell you that these investments all benefit from tax-deferred growth. Tax-deferred Growth: One of this annuity’s main advantages is that the investments inside this product give you tax-deferred growth. # 150223 Private Advisor Group and Warwick Valley Financial Advisors  are separate entities from LPL Financial. This is a review, not a recommendation to buy or sell a variable annuity. 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. 25%. Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing. Underlying Portfolio Operating Expenses: This is another ongoing fee charged for the investments inside of the variable annuity. Application No. But it’s never too early to dream about your future, and it’s never too early to start saving. 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. . Please try again. 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. You’re paying for it with the M&E fee we talked about earlier. Maximum yearly contribution is $19,500 for people aged 49 and under. Investment Options:  AXA EQUI-VEST variable annuity offers a wide range of investment options inside this contract. After inquiring of family and friends, I sought out AXA Equitable as I was told that Ms. Sheila was an exceptional financial planner. Brokers generally receive an up-front commission when they sell a variable annuity. The percentage can be as high as 7% and never less than 2.5%.”. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional should you have specific questions as they relate to your individual circumstances. who are earning $20,000 or less are considered to be in the same salary segment. For people who turn 50 by the end of the year a catch-up contribution allowance of $6,500 is permitted. Asset allocation does not ensure a profit or protect against a loss. You have a heart attack and go into the hospital. Help & Resources Learn more about 403(b) basics, retirement planning and investing, This review will help you do that. *The use of the terms of “financial advisor” or “advisor” for purposes of the survey questions and responses by both the consumers and the financial advisors queried does not necessarily imply that the individual is a registered investment adviser (RIA). As previously noted, mutual funds may be less expensive, but do not offer the same features and benefits. This fee is pretty standard for annuity contracts of this nature. Its an Equi-Vest TSA opened almost 15 years ago with a current balance of $350,000. These are pretty standard features that typically come with most income riders sold on annuities, and you can get them for less cost. A participant’s Maybe they bought you lunch in the teacher’s lounge and gave a short presentation about the basics of the 403(b) plan. And then there are realities of your busy day-to-day. AXA has not endorsed this review in any way, nor do I receive any compensation for this review. Simple, Account That might sound good for someone who is nearing retirement and wanting to protect their nest egg. Bonds are subject to market and interest rate risk if sold prior to maturity. Detailed information about these fees can be found by digging through the prospectus. Annual fee: 1% of the participant’s Personal Income Benefit account value. What is AXA equivest? Personal Income Benefit investment options give you the ability to turn your retirement savings into an annual withdrawal benefit. AXA states in the prospectus: “. Information on the EQUI-VEST ® Structured Investment Option and charges can be found in … See how we can help meet your individual financial goals - tips, tools, advice and product information. EQUI-VEST is a registered service mark of and is issued by AXA Equitable Life Insurance Company (AXA Equitable). But how much can you protect? 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. Warwick, NY 10990, Direct: 845-981-7300 NY Remit One Image Lockbox # 13823 . We are trying to decide what to do with my wifes 403B account, if anything. What is a 403(b)? $ EQUI-VEST. Furthermore, any investment that you purchase inside your 403(b) account can give you tax-deferred growth. 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. The amount of the withdrawal charge we deduct may be up to 6%, which is subject For many teachers, they have started saving for retirement inside of a Tax Sheltered Annuity (TSA). Over time, these additional costs can negatively impact your return potential. Monday 9:00 AM–8:00 PM ET Tuesday–Friday 8:00 AM–8:00 PM ET, Send a request to have one of our experts contact you. 1 “Eliminating Friction and Leaks in America’s Defined Contribution System,” Boston Research Group, April 2013. 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. EQUI-VEST® 403(b) is a variable deferred annuity issued by AXA Equitable Life Insurance Company (New York, NY). 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. 40 years offering 403(b) products under public employer retirement plans in California. At the time AXA looked like the lesser of all the evils on the schools vendor list. 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. There is no additional tax benefit to you when you buy this annuity inside a 403(b) or retirement plan. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 2 Income taxes are due on contributions and earnings from pre-tax accounts. As I found out through researching AXA 403(b)’s, they are, in my opinion, one of the worst products on the market. In 2017, the North American Securities Administrators Association listed “variable annuity sales practices” as one of its top investor threats. I was signed up with AXA at a school professional development meeting. First, the death benefit is only paid out if you die. individuals chose to work with a financial professional, 18% higher satisfaction with their retirement plan when working with a financial professional, Strategic investment advice to grow and protect your money. AXA EQUITABLE LIFE INSURANCE COMPANY . agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. Guarantees are based on the claims paying ability of the issuing insurance company. Petty, I know - I do think they might have lower fees as well. You basically lose all the returns you’ve gained. For someone trying to save for a retirement, fees are an important consideration. 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. [1] “Can Annuities Pass Muster?” The Free Library. Does that mean you get to earn higher returns? Founded in 1859, AXA Equitable Life Insurance Company is the #1 provider of retirement plans for K-12 schools,1 serving more than 820,000 participants in over 17,000 plans. [1], Income Rider Benefits: Personal Income Benefit. These are typically 403(b)s offered by insurance companies (AXA, VALIC, MetLife, etc. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. But you should consider whether the cost of this feature is worth the potential benefits you could receive. Source: Equitable's Value of the Advisor study, 2018. For example, if you are contributing $1,500 a month to your retirement plan, and 10 years into your contract you want to make a small withdrawal to pay off your home, you would have to pay 5% to AXA on any contributions made during the five previous years. However, in general, variable annuities will add at least 1% in costs just for the M&E fee alone, not to mention the fees for the variable sub-accounts and income riders that can (and often are) added on. The peer benchmarks displayed were developed in partnership with the Employee Benefit Research Institute (EBRI). Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (Equitable America), an AZ stock company with main administrative headquarters in Jersey City, NJ, and Equitable Distributors, LLC. 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. Third, you really have to ask yourself, what are the chances that you will die during the same year as a big market downturn? Contributions to a 403(b) plan and earnings may not be withdrawn until you: 1) Attain age 59 1/2 ; 2) Sever from employment with the employer who provided the 403(b) funds ; 3) Die ; 4) Become disabled in accordance with the provisions of the Internal Revenue Code. 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.”. 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. This is a detailed post about a popular 403(b) annuity product, the AXA EQUI-VEST variable annuity. How do the fees in this particular annuity stack up against the fees inside other investment options? This charge is common for variable annuities, but it’s not something you have to pay with all annuities. 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