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. The true cost of fees over the course of teaching career is illustrated below. by krow36 » Tue Feb 14, 2017 7:38 pm, Post As I found out through researching AXA 403(b)’s, they are, in my opinion, one of the worst products on the market. 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. 25%. 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. Having a Roth IRA at Vanguard and a 403b account at Fidelity is not a problem—I wouldn’t bother moving the Roth IRA. 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. A 403(b)(7) custodial account program provides mutual fund investment options to 403(b) plan participants. 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. 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. What is a 403(b)? For the investor who is age 65 and near the time of retirement, this might give you a layer of protection, but keep in mind that with this type of annuity, you’ll be paying over 2.5% annually just to get this benefit, and these fees negatively impact your return potential. The target date is the approximate date when investors plan to start withdrawing their money. This would give people access to both Vanguard and Fidelity options, along with a bunch of others. A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. But there are a few differences. But you should consider whether the cost of this feature is worth the potential benefits you could receive. Option, as in one. No match provided. 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). A fee charged by an investment manager to manage an investment fund. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. 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. 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. 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". I had AXA at one time. 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. Thanks for reading this review. Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. I did that for you. 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. 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. “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. I was able to go through the vanguard/newport group 403b enrollment for my wife. 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 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. Home » Blog » An Independent Review of: The AXA EQUI-VEST® (Series 201) contract for employer-sponsored 403(b) retirement plans. The surrender fees are stupid. I spoke with a different AXA adviser and he told me the same thing. I was a new teacher and just following what everyone else wad doing, then I found bogleheads... Take a look at this document. Over 30 years the 1.75% annual fee costs you 65.37% of your real profits. 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. All deferred annuities provide tax-deferred growth potential, not just this one. If the annuity doesn’t help move you toward your retirement goals, then it might not be the right choice for you. by krow36 » Sun Oct 20, 2019 11:28 pm, Post Yet, over 50% of teachers are using them to save for retirement. This means that if you move jobs you won’t need to worry about changing your MPO log in details. 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