More confidence for the future. There's a lot you've accomplished - and likely so much more you want to do. Hi, I am a new teacher in NY and someone from AXA has been in the school for the past week pushing the AXA Equitable Equi-Vest 403b plan. Savings must be between $0 and $9,999,999. They won’t charge you the $30 fee if your account value is $25,000 or more. But you should consider whether the cost of this feature is worth the potential benefits you could receive. Read prospectuses carefully before investing. 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. I wanted to know if anyone knows if they are a good company to start a 403b with. One thing to be aware of with this particular annuity is that the surrender charge is based on how long your contributions have been in the contract. EQUI-VEST. They also typically allow a 10% free withdrawal amount subject to federal income tax withdrawal restrictions. One percent is a pretty standard charge for income riders, but do you need it? It’s very common for people to withdraw money from their retirement plans. Thanks for reading this review. Says AXA: “No more than 25% of any contribution can be allocated to the GIO.”. A 403(b) is a retirement plan designed for educators and available through your school district. 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. 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. Teachers: Is the Death Benefit Killing Your Retirement Plan? Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing. AXA Equitable may, upon advance notice, discontinue, suspend, or change Segment offerings. Retirement may seem far away, especially when you’re setting out on your own and starting to figure out life. This is a detailed post about a popular 403(b) annuity product, the AXA EQUI-VEST variable annuity. every But how good is the protection? *Standard and Poor’s Rating Service provides ratings which measure the claims-paying ability of an insurer. Equitable Advisors is the brand name of Equitable Advisors, LLC (member, have an Equitable Advisors Financial Professional contact you, System availability 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. As previously noted, mutual funds may be less expensive, but do not offer the same features and benefits. The internal expenses of the sub-accounts for this particular variable annuity range from 0.61% to 2.09% and average around 1.03%. This annuity does not offer that. Yet, over 50% of teachers are using them to save for retirement. And then there are realities of your busy day-to-day. Simple, Account . If you 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. month 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. I am legally obligated to make recommendations that are in the best interest of my clients. Nearly twice the median account balance was achieved when As I found out through researching AXA 403(b)’s, they are, in my opinion, one of the worst products on the market. 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. Gain a much clearer sense of whether this annuity fits your individual savings needs so that you can make an informed decision. How about the Guaranteed Interest Option (GIO)? Distributor (Please check one) ¨ AXA Advisors ¨ AXA Distributors 2. 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. Mailing Instructions: Express Mail: (with money): JPMorganChase 4 Chase Metrotech Center, 7th Floor . However, think carefully about whether or not this specific variable annuity with the structure of its surrender fees, agent commissions, and income rider options would best support your retirement goals. 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). 2. This independent review will cover the following information on the AXA Equi-Vest Annuity: How will this AXA annuity product review help you? AXA Equitable Life Insurance Company offers several types of annuities through a national network of agents and financial advisors. That might sound good for someone who is nearing retirement and wanting to protect their nest egg. Brokers generally receive an up-front commission when they sell a variable annuity. 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. See how we can help meet your individual financial goals - tips, tools, advice and product information. Let’s examine each fee and how they stack up against other investment options. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. Internal Revenue Code Section 403(b) places restrictions on certain withdrawals from 403(b) plans. Knowing how your savings will support your passions, your health and your family is the peace of mind you’ve earned. E-mail:, © 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). Personal Income Benefit investment options give you the ability to turn your retirement savings into an annual withdrawal benefit. This charge is common for variable annuities, but it’s not something you have to pay with all annuities. Okay. Fax: (845) 981-7299 This fee comes right out of your account annually for the life of the investment, whether your investments earn money or not. Honestly, we're probably going to roll it over into a 403b from ING, as AXA is no longer the preferred 403b provider for her district and I prefer ING's investment options and user interface. 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%. A common trait among top savers is that they get help from a financial professional to guide smart choices and keep their plan on track as life evolves. 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. But how much can you protect? 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. A 403(b) plan is a high-visibility benefit that can help employees save for their retirement and enhance your value as an employer. Contract (Please check one) ¨ 403(b) Public, Charter or Private Schools (K-12) ¨ 501(c)(3) ¨ Higher Education (Colleges and Universities) Is the Plan subject to ERISA? For people who turn 50 by the end of the year a catch-up contribution allowance of $6,500 is permitted. 2018. such guarantees.”. $ Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN). 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. 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. Typically speaking, a surrender fee is only assessed when an investor makes a withdrawal prior to a specified time. 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. Does that mean you get to earn higher returns? The target date is the approximate date when investors plan to start withdrawing their money. Investing in mutual funds involves risk, including possible loss of principal. The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. 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. 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 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). How do the fees in this particular annuity stack up against the fees inside other investment options? Maybe they bought you lunch in the teacher’s lounge and gave a short presentation about the basics of the 403(b) plan. 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. No matter where you are today, everyone starts somewhere. For someone trying to save for a retirement, fees are an important consideration. AXA has not endorsed this review in any way, nor do I receive any compensation for this review. It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. The benchmarks were created by analyzing the account balances and contribution levels from EBRI’s Retirement Security Projection I’ll be going into the details when we get to the benefits and features section. Brooklyn, NY 11245-0001 . Convenient, asset-based fees that decrease as the plan grows. 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. life, Long-term 403(b) TSA Application . The prospectus and, if available, the summary prospectus contains this and other important information about the variable annuity contract and sub-accounts. EQUI-VEST® 403(b) is a variable deferred annuity issued by AXA Equitable Life Insurance Company (New York, NY). years old and earn approach, Powerfully Overall Fees: There are additional fees associated with variable annuities that are not found in other types of annuities or mutual funds. 28 Railroad Ave, Suite 2B We are trying to decide what to do with my wifes 403B account, if anything. 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). 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. You see a $45,000 drop in your total account value, and your new account balance is now $105,000. 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. 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. APPLICATION FOR EQUI-VEST STRATEGIES EDC (SERIES 901) GROUP ... 2. acknowledge, understand and agree to: the elections made in this Application, the various levels of fees, charges, and funding arrangements under the Contract. 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.  The variable annuity carries additional fees that should be considered. And speaking of return potential, selecting the income benefit rider will restrict your investment options. Workplace retirement savings plans can be a smart and effective way to build wealth now that may be your income in retirement. You want to compare prices and features, and understand exactly what you’re buying. The SIO enables you to seek growth, up to a limit, with some downside protection. AXA Equitable Life Insurance Company . Make adjustments and add in other savings to see how changes affect your goals. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Our retirement education center provides resources and tools to support you throughout your journey. Our areas of expertise are applied to a range of products and services that are adapted to the needs of each and every client across three major business lines: property-casualty insurance, life, savings & health and asset management. This offers a guaranteed rate of interest and a guarantee of principal. The fees on the current 403(b) can be drastically reduced. Then, you do the math and realize, you’ve only paid in $100,000. 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). If you have an account with us, your user ID and password will not change. Savings must be between $0 and $9,999,999. A career devoted to helping others reach their full potential creates unique needs. Third, you really have to ask yourself, what are the chances that you will die during the same year as a big market downturn? It’s a perk that comes with the plan. You basically lose all the returns you’ve gained. AXA EQUITABLE LIFE INSURANCE COMPANY . Asset allocation does not ensure a profit or protect against a loss. The one rider I analyzed had a 1% fee and it locked in returns at the high-water mark. 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. As a participant in a 403(b) account, you have the choice to invest in either mutual funds or annuities.
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