In this case, AXA charges its contract holders a 5% penalty on any funds withdrawn that exceed the free withdrawal amount, but the duration of this fee starts over when you make a contribution. Mailing Instructions: Express Mail: (with money): JPMorganChase 4 Chase Metrotech Center, 7th Floor . 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. 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. AXA Equivest® Series 201 Variable Annuity AXA Equitable’s Equi-Vest series 201 is a variable deferred annuity that offers a convenient way to contribute and invest for retirement and can be used as a funding option for 403(b) plans. A 403(b) is a retirement plan designed for educators and available through your school district. A 403(b) plan is a high-visibility benefit that can help employees save for their retirement and enhance your value as an employer. Detailed information about these fees can be found by digging through the prospectus. First, the death benefit is only paid out if you die. NY Remit One Image Lockbox # 13823 . The contract also offers death benefit protection and, as discussed earlier, it offers a Personal Income Benefit for an additional cost. 2. such guarantees.”. Make adjustments and add in other savings to see how changes affect your goals. Once you do retire, the difference between paying 1% or 2% could mean running out of money sooner. Overall Fees: There are additional fees associated with variable annuities that are not found in other types of annuities or mutual funds. AXA Equitable pays contribution-based and asset-based compensation to their agents. Thanks for reading this review. Convenient, asset-based fees that decrease as the plan grows. What is AXA equivest? And then there are realities of your busy day-to-day. ). 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. If you’re looking for protection from market risk, you may select the Structured Investment Option (SIO) available within certain EQUI-VEST variable annuities. 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. Wrong. This creates ongoing compensation for your broker. , Income Rider Benefits: Personal Income Benefit. 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. In this case, the AXA Equi-Vest variable annuity agrees to pay out your total contributions even if your account takes a terrible market hit. EQUI-VEST is a registered service mark of and is issued by AXA Equitable Life Insurance Company (AXA Equitable). 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.”. 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. © 2020 Equitable Holdings, Inc. All rights reserved. The prospectus and, if available, the summary prospectus contains this and other important information about the variable annuity contract and sub-accounts. I have saved approach, Powerfully 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. Please try again. AXA states in the prospectus: “. Helping you achieve your goals and build a tomorrow that’s worth looking forward to. . EQUI-VEST® is a deferred annuity contract issued by AXA Equitable. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. 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. There is no additional tax benefit to you when you buy this annuity inside a 403(b) or retirement plan. This annuity also gives the agent commissions based on your contributions. This independent review will cover the following information on the AXA Equi-Vest Annuity: How will this AXA annuity product review help you? agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. 1 “Eliminating Friction and Leaks in America’s Defined Contribution System,” Boston Research Group, April 2013. ... among other fees and charges, a charge for certain withdrawals that exceed the free withdrawal amount. 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. If you have an account with us, your user ID and password will not change. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. Many of you probably signed up with a sales rep or agent that came to visit your school. Seeing how people of similar ages and incomes are saving can be inspirational. Tax-deferred Growth: One of this annuity’s main advantages is that the investments inside this product give you tax-deferred growth. Nearly twice the median account balance was achieved when Personal Income Benefit investment options give you the ability to turn your retirement savings into an annual withdrawal benefit. Please replace any bookmarks with www.equitable.com. Fax: (845) 981-7299 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. 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. This option gives you different investment strategies designed to adjust with you as you move through the phases of your life and become more conservative. But you’re probably already getting this benefit. Asset allocation does not ensure a profit or protect against a loss. In 2017, the North American Securities Administrators Association listed “variable annuity sales practices” as one of its top investor threats. 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. As a participant in a 403(b) account, you have the choice to invest in either mutual funds or annuities. Application No. 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. Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. 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. One percent is a pretty standard charge for income riders, but do you need it? It offers Structured Investment Options (SIO) that enables you to invest for growth with some downside protection for a set period of time. 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. 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. Find out why I suggest every teacher dump their AXA 403(b): [VIDEO REMOVED FOLLOWING PRESSURE FROM AXA’S LEGAL COUNSEL] 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. peer segment is selected based on their age and nearest salary, which is broken down into $5,000 increments. When your contract is annuitized, your money is converted into payouts (this being the payout phase). The percentage can be as high as 7% and never less than 2.5%.”. If you have an annuity or other financial product you’d like to see an in-depth review on just let me know, I’d be happy to take a stab at it. Gain a much clearer sense of whether this annuity fits your individual savings needs so that you can make an informed decision. At the time AXA looked like the lesser of all the evils on the schools vendor list. But how good is the protection? Annual fee: 1% of the participant’s Personal Income Benefit account value. 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. Yet, over 50% of teachers are using them to save for retirement. Okay. The death benefit is often sold as a way to guarantee that even if the market goes down and your contract loses money, a death benefit would still be paid. You listened and absorbed as much as you could, but there is a chance that some of the facts were not fully understood during the sales process. They are sold only by prospectus. “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. Once a contract owner selects a Personal Income BenefitSM, they will be limited to one of these five allocation models: AXA also gives you other options if you don’t want to pay the income rider fee. The AXA EQUI-VEST® 201 series for 403(b) plan is a deferred annuity contract that is designed for school district employees. Then, you do the math and realize, you’ve only paid in $100,000. Whether the higher fees make sense for you will depend on your specific needs and situation. 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. I mention the $40 annual fee as it is a very common annual charge in many 401k/403b plans on top of the underlying fund ER fees. 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. You want to compare prices and features, and understand exactly what you’re buying. Issued by AXA Equitable Life Insurance Company. AXA has entered into sub-advisory agreements with Fidelity, Goldman Sachs, Invesco, Ivy Funds, Lazard, MFS, Oppenheimer, PIMCO, Franklin Templeton and Van Eck. This information was gathered from their prospectus dated May 1st 2018 and is not a substitution for individual tax or legal advice. In the year of 2006, I realized that I was fast approaching retirement age. My goal is to make my review of annuities as impartial and objective as possible. 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.
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