Anyone Heard of AXA?

[indiana260]

Isn't there a .6 charge on NA 5.5 rider?
That's why I like the AE riser better for this particular time horizon.

Another option would be NA income choice 14. I think it has a built in income rider at no cost. Not 100% sure on that tho

 

[KRobby]

This is why I am concerned. It seems too good to be true.

Ok, so assuming this is a too good to be true and loaded with fees option, what would be a better one?

It's not too good to be true. Simply, the way you describe it makes us think you don't understand it.

The return you're talking about is for the income account. It's not the same as your value account, that won't come with a minimum guarantee from a variable annuity.

You should ask about the FIA's if you want guarantees on the income and account values, your friend may earn more commish on those too.

 

[scagnt83]

If you were 40 and had 100-200k stuck in the annuity world and wanted to make sure you were getting a decent return over the next 25 years regardless of the stock market, where do you put it?

NWL Ultra Value 9. It has a 95% participation rate in the monthly average of the S&P 500, along with a 30bps spread.

Its historical lookbacks are by far the highest among all of the IA options on the market at the moment. (6% midpoint, 2% low, 11% high)


If not that I would opt for something like the Midland Select 14, I think it is around 7% caps last I checked.

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I appreciate the insight. In general are fees a lot lower with fixed annuities versus variable?

In general fixed annuities have NO fees that are automatically issued with the contract. However, there are some rare exceptions to this.

Fixed Indexed Annuities also have no fees generally speaking.
But like all things in life there are always exceptions to this.
And some do have a fee like spread against gains.

And obviously if you want to add an Income Rider or Death Benefit Rider that will cost you a Fee. (although there are some free riders out there too)

But even the Fees on an IA are tiny compared to a comparable VA.

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I looked around online and see Jackson National has one with a 4% minimum and a 10% maximum cap. I think they can change those each year though, can't they?

You are talking about the income rider portion only. Remember that the actual liquid account is at the mercy of the market. And 4% is an extremely low guarantee for an Income Rider.

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25 years of growth potential, with primary desire to have a source of retirement income. I do not want to worry about the stock market tanking and my capital being diminished. I am ok giving up SOME portfolio gains in order to accomplish this, but still need it to be a net positive after the fees and inflation.

You basically need to decide between 2 different choices here:

1.
Let the money accumulate for 25 years, then figure out a distribution plan 5 years out from retirement.

This options means NOT paying for an income rider. Just trying to get the most growth possible for your risk tolerance.


2.
Go with an income rider.

As already mentioned AE has a 5.5% Rider that is free.

Both NA and Midland will let you add on a 5.5% Rider for a small fee. Midland happens to have better payout rates vs. NA last time I checked.


Im not sure if there is a min issue age (someone will chime in here for me im sure) but the Allianz 360 has excellent payout rates, especially for higher ages. And the growth of the rider is the same as the growth of the indexed account.


An income rider can actually make a lot of sense for a younger person. Many people might disagree with that statement. But think about the payout rate/mortality part of the equation.

Right now you can guarantee a 6% payout rate at age 70 with an income rider.
The reason it is that rate is because a 70 year old is currently expected to live another 12-17 years on average.

But, 25 years from now in year 2039, I guarantee you that a 70 year old will have a much longer life expectancy.... which would equal a lower payout rate than the 6% you can lock-in right now.
How much lower it will be in 25 years all depends on modern medicine, lifestyle choices of the US, and how many times they decide to recalculate the life expectancy tables. But I guarantee you that it will be lower.


So it could be a very wise decision to opt for an income rider, especially if income is your goal. I would look at the 360 for this personally. Mostly because it has the most growth potential out of the rider options, plus it has very strong inflation increase options too.

 

[AnonymousOne]

Do midland and ae offer those riders at age 40 in perpetuity? Save me the search if you know.

 

[scagnt83]

Do midland and ae offer those riders at age 40 in perpetuity? Save me the search if you know.

Yes.

As a correction I believe that AE is now at 4% per year rollup for their free rider. So Midland is a better deal.

 

[NWBenefitProvider]

Just looked at the Jackson National line and they have either a 7 or 10 year fixed indexed annuity which would cap at 5.75% and guaranteed not to lose principal unless surrendered early. Also no fees.

They said I could also get the compensation since I am licensed for life and fixed annuities, so that could boost returns also.

I'm not sure I understand the 4% income riders. Don't those just add a massive fee?

Now I am thinking that I should be looking for the highest capped fixed indexed annuity and then when it runs the term, reset it with whatever is best at that time. Try to stay away from big fees and then also factor in the commission as part of the increased return.

Are you guys writing these for yourselves too and what are you picking? This is turning out to be quite interesting, as I was about to leave several thousand dollars in comp on the table.

Thank again for all of the responses.

 

[Tahoe Ray]

I just don't see a reason to pay for a guarantee withdrawal benefit for the next 25+ years. If that's a feature you like, you may be better off waiting to add it as you get closer to actually taking an income from the investment (assuming these riders will still be around in 25+ years).

As for Phoenix Life underperforming, that is due in part to the sub-accounts being offered in their VA product along with the drain of fees. One option would be the Monument Advisor VA from Jefferson National. It has a $20 per month charge and 350+ investment options. Some with very low expense charges such as the Vanguard Index which is at 0.17%. Just using this one fund as an example, your total expense on $200,000 would be 0.29% compared to 3%+ with your typical VA. A savings of 2%+ in expense each year could mean a very large difference in your balance at retirement.

Now if your friend adds enough value to warrant the much higher expense charges, then go for it. But I'd at least look at the Jefferson National VA and maybe even the VA that Vanguard offers.

This is the direction that I would be looking in as well....at age 50-55, when you're nearing retirement, then you can shop around for riders, rollups and ratchets...etc.

For now, I would look for products that are low fee, with a large selection of investment options, that also offer full market participation. As sman points out, Vanguard and Jefferson National are two good places to start.

 

[sman]

This is the direction that I would be looking in as well....at age 50-55, when you're nearing retirement, then you can shop around for riders, rollups and ratchets...etc.

For now, I would look for products that are low fee, with a large selection of investment options, that also offer full market participation. As sman points out, Vanguard and Jefferson National are two good places to start.

He doesn't appear to want any risk so these products are likely out.

What are your thoughts on the BCA from Athene (formerly Aviva)?

 

[AnonymousOne]

We have spoken about fee free annuities with riders that are free or a fraction of 1%. Where do you get massive fees?
Yes make sure you get the comp..........frustrating.

Just looked at the Jackson National line and they have either a 7 or 10 year fixed indexed annuity which would cap at 5.75% and guaranteed not to lose principal unless surrendered early. Also no fees.

They said I could also get the compensation since I am licensed for life and fixed annuities, so that could boost returns also.

I'm not sure I understand the 4% income riders. Don't those just add a massive fee?

Now I am thinking that I should be looking for the highest capped fixed indexed annuity and then when it runs the term, reset it with whatever is best at that time. Try to stay away from big fees and then also factor in the commission as part of the increased return.

Are you guys writing these for yourselves too and what are you picking? This is turning out to be quite interesting, as I was about to leave several thousand dollars in comp on the table.

Thank again for all of the responses.

 

[Tahoe Ray]

He doesn't appear to want any risk so these products are likely out.

What are your thoughts on the BCA from Athene (formerly Aviva)?

I missed the part about the market tanking (I should have read this thread more thoroughly)...another part of that post mentions "decent return over the next 25 years regardless of the stock market, where do you put it?"

Well, if we're talking regardless of the stock market: we have fixed rate annuities, bonds, the bank, gold, real estate, etc. Look for investments that have little stock market correlation, right?

I just can't get behind an index annuity with a 25 year time horizon at such a young age...I start thinking riders 7-12 years out from retirement. Prior to that, I want my foot on the gas (just me).

As far as BCA, I can see the attraction for accumulation but I'm probably not the best person to ask. I just really don't like any index product strictly from an accumulation standpoint at such a young age. There is just too much that can happen at the carrier level and they have too much control over how much money you make. I'm just not a fan...