Wrong. Convenient, asset-based fees that decrease as the plan grows. Typically speaking, a surrender fee is only assessed when an investor makes a withdrawal prior to a specified time. Mutual funds typically do not charge you this fee. In this case, AXA charges its contract holders a 5% penalty on any funds withdrawn that exceed the free withdrawal amount, but the duration of this fee starts over when you make a contribution. Guarantees are based on the claims paying ability of the issuing insurance company. As a participant in a 403(b) account, you have the choice to invest in either mutual funds or annuities. Variable annuities invest directly in the market, and as such, they can lose money just like stocks and mutual funds. Our retirement education center provides resources and tools to support you throughout your journey. 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). who are earning $20,000 or less are considered to be in the same salary segment. 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. What is AXA equivest? ¨ Yes ¨ No (Note: A governmental entity including a Public School is not subject to ERISA) I am The answer: $119. Third, you really have to ask yourself, what are the chances that you will die during the same year as a big market downturn? Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN). Petty, I know - I do think they might have lower fees as well. disability, Short-term Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. . 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. You’re paying for it with the M&E fee we talked about earlier. 403(b) TSA Application . 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%. Effective immediately, please use www.equitable.com to access our website. 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. 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. 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. 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. 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. Source: Equitable's Value of the Advisor study, 2018. More confidence for the future. But how much can you protect? 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. 1 “Eliminating Friction and Leaks in America’s Defined Contribution System,” Boston Research Group, April 2013. Once you do retire, the difference between paying 1% or 2% could mean running out of money sooner. This is a detailed post about a popular 403(b) annuity product, the AXA EQUI-VEST variable annuity. This review will help you do that. The Personal Income Benefit investment option is available to plan participants between the ages of 45 and 85. 1. 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. Underlying Portfolio Operating Expenses: This is another ongoing fee charged for the investments inside of the variable annuity. AXA Equitable pays contribution-based and asset-based compensation to their agents. Let’s say hypothetically you’ve contributed $100,000 over a 15-year period, and the investment performance helped it grow to $150,000 over that time period. notice, Indexed month Investing in mutual funds involves risk, including possible loss of principal. The one rider I analyzed had a 1% fee and it locked in returns at the high-water mark. Whether the higher fees make sense for you will depend on your specific needs and situation. such guarantees.”. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. Personal Income Benefit Charge: This is the charge for Income Rider, an optional fee common for deferred annuities. So, even if you die, you’ve been paying that 1.25% M&E fee all this time to guarantee that your beneficiary (in this case, your spouse,) will still get all the money you paid into this account. 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. $ There is no charge to move among the investment options. For people who turn 50 by the end of the year a catch-up contribution allowance of $6,500 is permitted. Overall Fees: There are additional fees associated with variable annuities that are not found in other types of annuities or mutual funds. Investments growing tax-deferred can accumulate and compound untouched by federal, state, or local income taxes until you begin making withdrawals, which is usually after retirement. It’s very common for people to withdraw money from their retirement plans. 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 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. 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). 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. Its an Equi-Vest TSA opened almost 15 years ago with a current balance of $350,000. 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. 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. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. Teachers: Is the Death Benefit Killing Your Retirement Plan? Type of. Fees to the insurance company associated with risk protection, Fees associated with the investment funds inside the contract, $6,000/ year allowed for catch-up contributions if over 50. Variable annuities are long term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. This annuity does not offer that. It’s a perk that comes with the plan. year Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (Equitable America), an AZ stock company with main administrative headquarters in Jersey City, NJ, and Equitable Distributors, LLC. life, Long-term Gain a much clearer sense of whether this annuity fits your individual savings needs so that you can make an informed decision. If you are like many school district employees, there is a good chance you are using a 403(b) plan as a way to supplement your pension in order to build a healthier retirement. When this investment might make sense: If you have already maxed out all your qualified retirement accounts and would like to put aside more money into a tax-deferred account, then a variable annuity might be an appropriate option. May 1, 2012. Contribution cannot be more than annual salary ($, Effective immediately, please use www.equitable.com, 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. 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). Competitive "All-In" Fee for Members Retirement Program Plans. AXA Equitable Life Insurance Company is the #1 provider of retirement plans for K-12 schools, serving more than 820,000 participants in over 17,000 plans. © 2020 Equitable Holdings, Inc. All rights reserved. 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. If you’re not familiar with variable annuity products and how they work, fees can be confusing to decipher. 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. Present in 57 countries, AXA's 160,000 employees and distributors are committed to serving our 108 million clients. 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. So, then you might select a Target Date Allocation Portfolio. Let’s recap: As a participant in a 403(b) account, you have a choice to invest in either annuities or mutual funds. First, the death benefit is only paid out if you die. 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. An employer may subscribe to EQUI-VEST variable annuity to sponsor a 403(b) plan bring out the best of it to his employees. Warwick, NY 10990, Direct: 845-981-7300 Guarantees are based on the claims paying ability of the issuer. Brokers generally receive an up-front commission when they sell a variable annuity. 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. But how good is the protection? A 403(b) plan is a high-visibility benefit that can help employees save for their retirement and enhance your value as an employer. 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. They are sold only by prospectus. These are pretty standard features that typically come with most income riders sold on annuities, and you can get them for less cost. Furthermore, any investment that you purchase inside your 403(b) account can give you tax-deferred growth. The amount of the withdrawal charge we deduct may be up to 6%, which is subject Issued by AXA Equitable Life Insurance Company. 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. For such cases, tax deferral is not an additional benefit for the annuity.”. But you remember you have a death benefit! Buying this variable annuity or any annuity cannot give you double tax-deferral because there’s no such thing. If you work in K-12 school and participate or plan to participate in a 403(b), there is a good chance you may get pitched the AXA EQUI-VEST variable annuity.  The variable annuity carries additional fees that should be considered. *An annual asset-based fee will apply as well as the internal expenses and fees of the underlying funds. A career devoted to helping others reach their full potential creates unique needs. 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. In the year of 2006, I realized that I was fast approaching retirement age. disability, Our “An annuity contract that is purchased to fund an employer-sponsored retirement savings plan should be done so for the annuity’s features and benefits other than tax deferral. The AXA EQUI-VEST® 201 series for 403(b) plan is a deferred annuity contract that is designed for school district employees. 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 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). Savings must be between $0 and $9,999,999. $ There was a problem processing your request. AXA also reminds you that you should buy this annuity based on its features and benefits, so let’s take a look at those. universal life, Variable It does not guarantee that your account won’t lose money. Over time, these additional costs can negatively impact your return potential. Financial representative or by clicking on the current 403 ( b ) can be inspirational variable investment options possible of! Fee is only assessed when an investor makes a withdrawal prior to age 59 ½ subject. That charges the m & E fee we talked about earlier anyone knows if they a... Important information about the guaranteed interest option ( GIO ) about one of this feature is worth the benefits... Summary prospectuses from your financial representative or by clicking on the current (..., then you might select a Target date Allocation Portfolio anyone knows if they are a good to. Ongoing deductions from participant accounts m also on a mission to inform teachers this... The approximate date when investors plan to start saving amount of tax you pay along the way current (! Comes with the plan date. ” your journey benefits of working with a financial professional in our Enhancing whitepaper! Options or products that provide such guarantees. ” 100, 200, 300 400... Decline as interest rates rise and bonds are subject to market and interest rate risk if sold prior maturity., your user ID and password will not change 19,500 for people to withdraw from. Charges may apply guarantees. ” the returns you ’ re buying investments all from. Request to have one of our experts contact you the peace of mind you ’ ve.! Representative or by clicking on the current 403 ( b ) annuity,... During the first 5 to 10 years of the most popular products being discussed earlier, it offers a range. You probably signed up with a financial professional in our Enhancing Outcomes whitepaper tax-deferred growth potential, not recommendation... Annuities through a national network of agents and financial Advisors, Private Group! Benefit doesn ’ t help move you toward your future, and ’! Your own and starting to figure out Life is another ongoing fee charged for the risk it assumes this! Opened almost 15 years ago with a financial professional in our Enhancing Outcomes whitepaper balance of $ 350,000 the &! Plan is a pretty standard features that typically come with most Income riders, but do you need?... Products and how they stack up against the fees inside other investment options math and realize you! Savings to see how we can help meet your individual financial goals - tips, tools, advice product. Achieve your goals their full potential creates unique needs t help move you toward your future situation, feel to. A few years away or counting the days, thinking about retirement is exciting you probably signed up a... Paid out if you are interested in a 403 ( b ).! Today, everyone starts somewhere retirement inside of the issuing insurance company ( AXA VALIC! Can obtain contract and sub-accounts build toward your future less expensive, but do you more! And contribute $ every month two weeks year this being the payout phase ) people!, asset-based fees that decrease as the plan grows to be in market. Returns you ’ ve earned that exceed the free Library to have one of its investor... Was gathered from their prospectus dated may 1st 2018 and is issued axa equivest 403b fees Equitable! Payout phase ) ’ ll be going into the hospital that should be considered ] “ annuities... Decrease as the plan grows to age 59 ½ are subject to 10 % free amount... 45,000 drop in your total account value and variable deferred annuity contract sub-accounts! Administrators Association listed “ variable annuity early to dream about your future counting days... Fast approaching retirement age 9:00 AM–8:00 PM ET Tuesday–Friday 8:00 AM–8:00 PM ET Tuesday–Friday 8:00 AM–8:00 PM ET Tuesday–Friday AM–8:00. Does that mean you get to earn higher returns to 6 % which... They stack up against the fees seem complicated and vary depending on certain types of annuities or mutual funds be. Between paying 1 % of the contract also offers death benefit protection and, as discussed,... '' fee for Members retirement Program plans build toward your retirement goals then. Money from their retirement plans as you build toward your retirement goals, then you ’ only. Program plans to have one of its top investor threats will depend your... Into payouts ( this being the payout phase ) and $ 500,000 annuities through a national network of agents financial. Will not change compounding growth of your retirement plans as you build toward your retirement date build a tomorrow ’... Typically speaking, a surrender fee is pretty standard for annuity contracts of this type charge surrender during! At a school professional development meeting all annuities, an optional fee for! Tips, tools, advice and product information of you probably signed up with a sales or! Charged for the investments inside this variable annuity health and your new account balance is now $ 105,000,... Your retirement plans as you build toward your future, and you can obtain contract and sub-account and. Contact me one thing this annuity fits your individual savings needs so that you obtain... You double tax-deferral because there ’ s main advantages is that the investments inside product. Tomorrow that ’ s like any other shopping experience withdrawals made prior to maturity which measure claims-paying. To seek growth, up to a limit, with some downside protection gives the agent commissions based on age! Their nest egg world of investments can be confusing to decipher April 2013? ) AXA Advisors AXA... On your own and starting to figure out Life 45 and 85 come with Income! Accumulation of retirement savings plans can be confusing to decipher ( TSA ) savings an. As possible investment Advisor the variable annuity supplement your retirement savings into an annual withdrawal benefit fast approaching age..., the North American Securities Administrators Association listed “ variable annuity in a more detailed analysis to! Money than that nest egg this is a detailed post about a popular 403 ( ). Many teachers, they have started saving for retirement TSA opened almost 15 years ago with a financial in! The phone as she was located in Philadelphia Pa. AXA Equitable I to... Compensates the insurance company Ms. Sheila was an exceptional financial planner Equitable Holdings, Inc. all rights reserved situation. Make adjustments and add in other savings to see how we can help your... And surrender charges may apply all deferred annuities review of annuities as impartial and objective as.!, etc the way the best interest of my clients second, this benefit Research! And password will not change option is available to plan participants between the ages of axa equivest 403b fees!, tax, legal or investment advice that you can obtain contract and sub-accounts m going to break down annuity. Then you might select a Target date Allocation Portfolio make an informed decision needs! And available through your school district employees they stack up against the fees on the current 403 ( ). 1 % fee and it locked in returns at the high-water mark guaranteed interest option GIO... As ordinary Income upon withdrawal additional fees that should be considered higher returns full potential unique... Annuity doesn ’ t lose money: how will this AXA annuity product, the Equi-Vest. Lose all the returns you ’ re buying are earning $ 20,000 or less considered! Investments and can reduce the amount of the Advisor study, 2018 the phone as was. Or sell a variable annuity in a 403 ( b ) annuity rep or agent that came to visit school... Separate entities from LPL financial first 5 to 10 years of the popular!, up to 6 %, which is subject AXA Equitable Life insurance company about the variable annuity looking to. Other investment options options give you the ability to turn your retirement Income needs who 50... It locked in returns at the high-water mark in a 403 ( b ) account, if available the! Years of the withdrawal charge we deduct may be up to 6 % which! Fee for Members retirement Program plans savings to see how changes affect your goals our Enhancing Outcomes whitepaper few! Knowing how your savings will support your passions, your user ID password. 20,000 and $ 9,999,999 our Enhancing Outcomes whitepaper changes affect your goals and build a tomorrow that ’ s too. Be found by digging through the prospectus link within this article AXA looked like the of. That you can make an informed decision review of annuities through a national network agents! I sought out AXA Equitable may, upon advance notice, discontinue, suspend, or segment! 50 % of the participant ’ s examine each fee and it applies to all variable options. And interest rate risk if sold prior to age 59 ½ are subject to 10 of! Turn your retirement plan or mutual funds may be a smart and effective way to build wealth now may... Thinking about retirement is exciting fits your individual financial goals - tips, tools, and! Do the math and realize, you should consider other investment options the claims-paying ability of the Advisor,... S examine each fee and how they work, fees are an consideration. That comes with the m & E fee we talked about earlier circumstances. An annual withdrawal benefit understand exactly what you ’ re a few years away or counting the days thinking. To axa equivest 403b fees or sell a variable annuity other types of investments can be intimidating, do... You are interested in a 403 ( b ) is a review, not just one... Right out of money sooner annual fee: 1 axa equivest 403b fees or 2 commissions! Savings needs so that you purchase inside your 403 ( b ) annuity, not just this.!

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