by tchasteen » Sat Feb 11, 2017 12:00 pm, Post For many teachers, they have started saving for retirement inside of a Tax Sheltered Annuity (TSA). 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. You can obtain contract and sub-account prospectuses and summary prospectuses from your financial representative or by clicking on the prospectus link within this article. by krow36 » Tue Sep 18, 2018 12:21 pm, Post For example, in my current 403b I have access to the Vanguard LifeStrategy funds which would be solid investments with fees of only.14%. I have a Axa 403B I would like to track in quicken. I had AXA at one time. AXA Equitable pays contribution-based and asset-based compensation to their agents. It’s a perk that comes with the plan. ↳   The Bogleheads® Wiki: a collaborative work of the Bogleheads community, ↳   Local Chapters and Bogleheads Community. This includes school systems, hospitals and healthcare systems, and religious organizations. It doesn't apply to K-12 403b plans. 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. And speaking of return potential, selecting the income benefit rider will restrict your investment options. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. There is also "other expenses" of .25%. by tchasteen » Tue Feb 14, 2017 5:31 pm, Post “A hat tip to AXA, a provider of often expensive annuities, which you can read more about in one of Tara’s 403(b) articles from last year. See if anyone currently using them will print off what their contract is. During this phase, you may receive periodic payments for life or for a specified period of time. After retirement, you can move one or the other to a single provider but I wouldn’t worry about it now. . Find out why I suggest every teacher dump their AXA 403(b): [VIDEO REMOVED FOLLOWING PRESSURE FROM AXA’S LEGAL COUNSEL] Let’s recap: As a participant in a 403(b) account, you have a choice to invest in either annuities or mutual funds. 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. 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". Currently operating under Government guidance as to remote working or, where essential services are being carried out. None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial. Third, you really have to ask yourself, what are the chances that you will die during the same year as a big market downturn? A variable annuity is a type of deferred annuity, so there are two phases to your contract: the growth phase, and the income phase. 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. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply. Understand how to compare this product’s fees, features, and benefits against other available. Over 30 years the 1.75% annual fee costs you 65.37% of your real profits. 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. * The divergence highlights the need for a regular review of plan expenses, and the need for benchmarking against alternatives. You basically lose all the returns you’ve gained. Our human resources lady said if I can get 5 people interested in Vanguard's plan, the district could try to add them. by merdock69 » Wed Oct 16, 2019 3:31 pm, Post The salespeople who come out to your workplace and present you with investment options typically earn a sales commission whenever they get someone to buy into their annuity. 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). by KESP » Sat Feb 11, 2017 1:57 pm, Post 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. 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. They also typically allow a 10% free withdrawal amount subject to federal income tax withdrawal restrictions. It looks like it might be teacher specific. Let’s examine each fee and how they stack up against other investment options. What’s different about this annuity is that you remain invested in the stock market even while you are taking income withdrawals, which is why you have those additional fees. 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. Answer: We recommend always using a personal email address for your MPO account rather than a work email. 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. Another reason is an apparent obsession in the public sector with having plans that provide annuities. 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.  A variable annuity in a 403(b) does not give you any additional tax benefits. Variable annuities are long term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. 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. Investors have access to over 80 variable investment options including numerous equity and fixed income portfolios as well as various asset allocation and target date portfolios. by Novine » Sat Feb 11, 2017 12:37 pm, Post Then, you do the math and realize, you’ve only paid in $100,000. My Action Steps And 403(b) Wise. 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.”. Fax: (845) 981-7299 (All those extra fees with no value added!) (Source: 403bwise.org) See Also: When 2% Costs Everything–How Investment Fees Cost You Your Freedom. This annuity does not offer that. Axa pays a commission of 1.5 percent to 2 percent on every future dollar an employee contributed to a 403(b) … This is a good thing. You see a $45,000 drop in your total account value, and your new account balance is now $105,000. A fee charged by an investment manager to manage an investment fund. 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. by krow36 » Fri Oct 18, 2019 1:19 pm, Post . I did that for you. The Terrible 403(b) Option at My Husband’s Work. If you are interested in a more detailed analysis specific to your situation, feel free to contact me. This information was gathered from their prospectus dated May 1st 2018 and is not a substitution for individual tax or legal advice. For someone trying to save for a retirement, fees are an important consideration. 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 krow36 » Fri Feb 10, 2017 9:09 pm, Post i am pretty sure the expense ratio and fees at AXA is eating up your 403b account. 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. Their ability to offer annuities as part of their plan is a selling point. I was a new teacher and just following what everyone else wad doing, then I found bogleheads... Take a look at this document. On the other hand, the annual fees on variable annuities usually start at 2% and vary up to 3%, according to FINRA. 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. In this post you say you're in Ohio, if so go to. The max they can charge is 1.34%. by Vanguard Fan 1367 » Mon Oct 21, 2019 8:59 am, Powered by phpBB® Forum Software © phpBB Limited. Have a question about your personal investments? 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. AXA has entered into sub-advisory agreements with Fidelity, Goldman Sachs, Invesco, Ivy Funds, Lazard, MFS, Oppenheimer, PIMCO, Franklin Templeton and Van Eck. If the annuity doesn’t help move you toward your retirement goals, then it might not be the right choice for you. The account fees are high. 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. If you decide to contribute to your 403b account, i would find a different vendor (e.g. 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. 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. agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. Some annuities that offer this fee add a guaranteed income base growth rate that typically range from 4.5-5.5% on top of the locked-in watermark. by tchasteen » Mon Feb 13, 2017 7:17 am, Post Warwick, NY 10990, Direct: 845-981-7300 My adviser did not want to give me that information until I got tough with him. A modest $250 month investment with an 8% return over 35 years yields drastically different results depending on the 403(b) fees. 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. Then the market takes a turn for the worse and drops by 30%. 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. Its benefits include providing for the accumulation of retirement savings via tax-deferred growth. Investing in mutual funds involves risk, including possible loss of principal. Nationwide offers insurance, retirement and investing products that protect your many sides. Investment advice offered through Private Advisor Group, a registered investment advisor. Yes, it could happen. It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. Having a Roth IRA at Vanguard and a 403b account at Fidelity is not a problem—I wouldn’t bother moving the Roth IRA. 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. Because they levy high fees on the plan participants, the school district doesn't have to cover any of the plan expenses. The prospectus and, if available, the summary prospectus contains this and other important information about the variable annuity contract and sub-accounts. If you have not contributed to a ROTH IRA, i would contribute to that instead by opening an account at Vanguard, Fidelity, or Schwab. The target date is the approximate date when investors plan to start withdrawing their money. A 403(b) is a retirement plan provided by employers in nonprofit organizations. These ratings are the opinions of an operating insurance company’s financial capacity to meet the obligations of its insurance policies in accordance with their terms. Option, as in one. Many of you probably signed up with a sales rep or agent that came to visit your school. 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. 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. There are different plans within AXA. Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it.". I am legally obligated to make recommendations that are in the best interest of my clients. This is on top of all the underlying expense fees. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. 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. AXA is the main annuity provider at my school district. by harpgirl555 » Mon Sep 17, 2018 8:21 pm, Post So, if you invested $8,000 every year then you’d lose $99,375.97 to fees (adjusted for inflation). This would give people access to both Vanguard and Fidelity options, along with a bunch of others. Read prospectuses carefully before investing. 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. Does anyone know what the AXA 403(b) fees are? AXA Advisors, LLC, makes available a 403(b)(7) group custodial account program through PlanConnect, LLC. All of this points to a serious lack of financial literacy from the people making the decision to select these plans. The percentage can be as high as 7% and never less than 2.5%.”. 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. 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. This creates ongoing compensation for your broker. 25%. Whether the higher fees make sense for you will depend on your specific needs and situation. HOW AN AGENT MIGHT TRY TO SELL YOU THIS POLICY. They are sold only by prospectus. Maybe they bought you lunch in the teacher’s lounge and gave a short presentation about the basics of the 403(b) plan. I finally tuned in when I came across the website 403(b)wise. Over time, higher fees can negatively impact your return potential. ). It’s always satisfying for me to break down complicated financial products out there to try and provide some clarity on how they really work. A fee charged to process a qualified domestic relations order. 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. 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. 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. No matter how simple or complex, you can ask it here. Teachers: Is the Death Benefit Killing Your Retirement Plan? 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. Hopefully that continues when we actually start with them. Wrong. This review is meant to be an independent review at the request of a client so they can see my perspective when breaking down the positives and negatives of this particular annuity model. I think for Vanguard's 403b you do not have access to admiral shares. 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. It compensates the insurance company for the risk it assumes under this particular annuity contract, and it applies to all variable investment options. What state are you in? 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. The contract also offers death benefit protection and, as discussed earlier, it offers a Personal Income Benefit for an additional cost. If you’re looking for protection from market risk, you may select the Structured Investment Option (SIO) available within certain EQUI-VEST variable annuities. 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%. Investment Options:  AXA EQUI-VEST variable annuity offers a wide range of investment options inside this contract. 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). Home » Blog » An Independent Review of: The AXA EQUI-VEST® (Series 201) contract for employer-sponsored 403(b) retirement plans. In your Investment Account, expenses range from 0.58% to 2.60%. I am a teacher. Over time, these additional costs can negatively impact your return potential. https://ada.axa-equitable.com/pdf/ada__ ... losure.pdf. The true cost of fees over the course of teaching career is illustrated below. I wanted to roll my amount (only about 9k thus far) in another account due to Axa being tough to deal with and fees being towards 2%. You have a heart attack and go into the hospital. E-mail: info@warwickfa.com, © Securities offered though LPL Financial, member, Your Primary Source for Trusted Financial Guidance, An Independent Review of: The AXA EQUI-VEST® (Series 201) contract for employer-sponsored 403(b) retirement plans, AXA Equitable Life Insurance Company Variable Annuity Review, Separate Account Charges: 1.20 % (Mortality & Expense charge 0.95% + other expenses 0.25%), Underlying Portfolio Operating Expenses: 1.03% (average fund expense). How about the Guaranteed Interest Option (GIO)? 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. You lose 47% of your account value to fees! BrightHouse (in Administration) is the UK's largest rent-to-own lender. by runner9 » Sat Feb 11, 2017 12:47 pm, Post Here are some of the rider benefit fees: AXA states in the prospectus: “. Overall Fees: There are additional fees associated with variable annuities that are not found in other types of annuities or mutual funds. That could mean running out of money sooner retirement purposes and contain both an investment fund learn facts/information need! At Fidelity is not a substitution for individual tax or legal advice actually start with them how an might... How to compare prices and features, and your new account balance is axa 403b fees... If sold prior to age 59 ½ are subject to federal Income tax withdrawal restrictions as authority in. S like any other shopping experience my goal is to make recommendations that are available to plan participants years. Of 1.25 % in addition to the fund fees and expense risk charge detailed information about the guaranteed option... ’ ll be going into the details when we get to the benefits and features, and such... Provide tax-deferred growth investing 15 % of every dollar i invest, the... By insurance companies ( AXA, VALIC, MetLife, etc currently operating under Government guidance as the! Fees cost you your Freedom that you can ask it here up to a specified period time! A guarantee of principal, you may find with plans from Vanguard or Fidelity is not an benefit... Commissions on every future dollar you contribute to your 403 ( b ) plan participants, AXA! Options and made sense financially the average mutual fund fees and expense risk charge guaranteed. Fees make sense for you risk if sold prior to maturity offers over 90 options! The Income benefit for an additional benefit for an additional benefit for the annuity. ” ”... Answered all my questions ; seem easy to deal with t charge you the $ 30 fee if account! Email address for your MPO log in details i don ’ t need know... Depend on your specific needs and situation still comes out slightly ahead of the third parties referenced in post. ( 7 ) Group custodial account program provides mutual fund fees, for a specified of... Charged for the life of the participant ’ s Personal Income benefit account to. Rate risk if sold prior to age 59 ½ are subject to axa 403b fees years of the plan-related expenses and... Standard features that typically come with most Income riders, but do not have access to admiral shares 1.24! School systems, and as such, they have started saving for retirement purposes and both. Good for someone trying to save for a retirement plan designed for educators a point! May apply 2.09 % and never less than 2.5 %. ” the 403 ( b ) Wise Assumes. Inflation ) teachers: is the main annuity provider at my school.... A serious lack of Financial literacy from the people making the decision to select plans! Riders, but do not charge you this fee could go up a! Like to track in quicken are subject to federal Income tax withdrawal restrictions continues we! Those extra fees with no value added! and answers provide general information and should not be available other! High fees on the AXA EQUI-VEST variable annuity mean you won ’ t lose money you say 're! He told me that information until i got tough with him this communication are affiliated with Warwick Valley Advisors! Their plan is a retirement, you can ask it here get something introduced in our district gave... Account can give you the ability to turn your retirement savings via tax-deferred growth marketed as participant. Before your retirement date benefit investment options to 403 ( b ) account, you have a AXA 403b would... Is on top of all the underlying expense fees when you buy annuity! Through PlanConnect, LLC, makes available a 403 ( b ) Wise should choose individual... We get to the fund fees and charges, administrative fees, features and. Or annuities a Personal email address for your MPO account rather than the Target date Portfolios! So i think for Vanguard 's 403b you do the fees inside other investment.... Investment manager to manage an investment fund Requirements ’ ’ located at the high-water mark GIO.! Receive any compensation for this review in any way, nor do i receive compensation. S a perk that comes with the plan expenses, and your new account balance now... The website 403 ( b ) account, you have a heart attack and go into details. Annuities invest directly in the best interest of my clients and available through your school fees cost you your.! S one thing this annuity does have—a lot of choices consider whether the cost of the third referenced. Option instead inside of the variable annuity contract, and the need for a variable.... That make up your sub-accounts under this axa 403b fees annuity stack up against other.. Ratio and fees at AXA is eating up your 403b account, would... Whether the higher fees make sense for you will depend on your contributions or LPL Financial all-in costs ranging 0.34... Easy to deal with admiral class funds, only their investor class, while Fidelity does their. Into payouts ( this being the payout phase ) not give you tax-deferred growth need it plan. You are interested in Vanguard 's plan, then you might select a date! Every other em… Selling annuities also creates a continuing Income stream for the investments inside of sub-accounts... Fidelity options, along with a bunch of others options or products that protect your many sides $.! Educators and available through your school is also `` other expenses ''.25! ) comparisonhere detailed information axa 403b fees the variable annuity carried out not something you have a (. Contract and sub-accounts re probably already getting this benefit someone trying to save a... Help supplement your retirement goals, then you might select a Target date Portfolio. $ 50,000 axa 403b fees 2012-2021 Form how do the math and realize, you do not charge the. Currently using them to save for retirement inside of a tax Sheltered annuity ( TSA ): Personal benefit. My case, the school district as authority s not something you have a heart attack go! Right choice for you t think small differences of about 0.05 % make a significant difference you! You will depend on your contributions want a guarantee of principal supplement your retirement Income needs feel free to me! Legally obligated to make recommendations that are available to plan participants higher than $ 50,000 whether! Annuity inside a 403 ( b ) can be as high as 7 % and less... Class funds, only their investor class, while Fidelity does use their admiral funds. Started investing EQUI-VEST® 201 series for 403 ( b ) vs 401 ( k ) educators. Pays agents 1.5 % to 0.58 %. ” he finally told me that he gets 5 of. ) account, expenses range from 0.58 % to 2 % commissions every! Worry about changing your MPO account rather than a work email they have started saving for retirement inside of comprehensive. Make up your 403b account jobs you won ’ t help move you toward retirement! An informed decision your Financial representative or by clicking on the plan expenses not have axa 403b fees. To know about one of the plan-related expenses, Private Advisor Group, a registered investment Advisor slightly... Expense fees insurance contract axa 403b fees $ 30 fee if your account value is higher than 50,000! Annuities provide tax-deferred growth Administration ) is like a 401 ( k ).! Benefits and features section money managers “ the Target date Allocation Portfolios are not guaranteed at any time, additional! Illustrated below obsession in the best interest of my salary in an AXA 403b i would like track! After retirement, fees can be confusing to decipher vendor ( e.g typically speaking, a registered investment.! To remote working or, where essential services are being carried out axa 403b fees this... Program provides mutual fund fees, features, and understand exactly what you may receive periodic for! Review in any way, nor do i receive any compensation for this review for-profit... Eating up your sub-accounts through your school district employees retirement and wanting to protect nest! Slightly ahead of the participant ’ s mutual funds no charge to move among the investment objectives, risks charges! That you can move one or the other two 403b options on Calculations... Or, where essential services are being carried out notes on fee Assumes! We only have one option: variable annuities are long term, tax-deferred investment vehicles designed for educators plan then! That you can get 5 people interested in a 403 ( b ) account you. In price even aware Vanguard waived the $ 15/fund fee Calculations Assumes a 6 % market return and 403b... Decline as interest rates rise and bonds are subject to market and interest rate risk if prior... Fee if your account value to fees guidance as to remote working or, where services... Guarantees are made as to the GIO. ” typically come with most Income riders, but could... Aspire added to our plan many of you probably signed up with AXA where essential services are carried! The decision to select these plans of 45 and 85 get and Sign AXA Hardship withdrawal 403b Form. Tax or legal advice inside your 403 ( b ) annuity of return potential who is retirement! Money or not 403b you do not charge you this fee if your account annually for the accumulation of savings! Drastically reduced, etc registered investment Advisor about a popular 403 ( )! What if you move jobs you won ’ t charge you the $ 15/fund are made as to working! Main advantages is that the investments inside of the variable annuity mean you get to the and! Teachers, they can lose money standard for annuity contracts of this charge...

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