There is no additional tax benefit to you when you buy this annuity inside a 403(b) or retirement plan. 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. Trying to get something introduced in our district that gave people the most options and made sense financially. These frequently asked questions and answers provide general information and should not be cited as authority. Hopefully that continues when we actually start with them. by krow36 » Tue Sep 18, 2018 12:21 pm, Post I added the account as an Investing/Retirement 403B and track deposits from my paycheck into it, but cannot seem to link the account online. I think for Vanguard's 403b you do not have access to admiral shares. I don’t think small differences of about 0.05% make a significant difference unless you are dealing with very large accounts. such guarantees.”. As a participant in a 403(b) account, you have the choice to invest in either mutual funds or annuities. 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. Aspire got right back to me and answered all my questions; seem easy to deal with. Because they levy high fees on the plan participants, the school district doesn't have to cover any of the plan expenses. The 403(b) platform offers over 90 in-vestment options and 34 different money managers. Personal Income Benefit Charge: This is the charge for Income Rider, an optional fee common for deferred annuities. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. You want to compare prices and features, and understand exactly what you’re buying. “A hat tip to AXA, a provider of often expensive annuities, which you can read more about in one of Tara’s 403(b) articles from last year. It’s specifically designed for education and non-profit professionals, has the flexibility to adjust as your needs change and can help you turn your salary into a more comfortable retirement. Mine is a series 200. Please note that AXA Equitable will not process your request if the Employer sponsoring your 403(b) plan, or its designee, has specifically advised that hardship withdrawals are not permitted in its plan. This fee comes right out of your account annually for the life of the investment, whether your investments earn money or not. This offers a guaranteed rate of interest and a guarantee of principal. The MSCI EAFE Index consists of the following developed country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. The salespeople who come out to your workplace and present you with investment options typically earn a sales commission whenever they get someone to buy into their annuity. 403(b) plans work almost identically to 401(k) plans. Furthermore, withdrawals may “significantly reduce” the future income payments of the Personal Income Benefit for which you’re paying that additional 1%. 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. None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial. The school district name was in the pull down, they accepted the application and opened the account. That might sound good for someone who is nearing retirement and wanting to protect their nest egg. A teacher who works 40 years and has a variable annuity with AXA, VALIC, Security Benefit, MetLife (just to name a few) can lose over $350,000 due to fees. EQUI-VEST® is a deferred annuity contract issued by AXA Equitable. There is no charge to move among the investment options. Mutual funds typically do not charge you this fee. It offers Structured Investment Options (SIO) that enables you to invest for growth with some downside protection for a set period of time. When it comes between choosing between a 403b direct with Fidelity, direct with Vanguard or with Aspire self directed using either Vanguard or Fidelity, there is very little difference in costs. Notes on Fee Calculations Assumes a 6% market return and a 3% inflation rate. 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. This is a good thing. The true cost of fees over the course of teaching career is illustrated below. Find out more on the website. https://ada.axa-equitable.com/pdf/ada__ ... losure.pdf. But there are a few differences. Their ability to offer annuities as part of their plan is a selling point. by tchasteen » Sat Feb 11, 2017 12:00 pm, Post Get And Sign Axa Hardship Withdrawal 403b 2012-2021 Form . 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. Selling annuities also creates a continuing income stream for the brokers. The variable annuity carries additional fees that should be considered. 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. 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. If you have not contributed to a ROTH IRA, i would contribute to that instead by opening an account at Vanguard, Fidelity, or Schwab. Let’s examine each fee and how they stack up against other investment options. 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. 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. AXA states in the prospectus: “. 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. At least AXA engaged, letting me know that the Equi-Vest 201 variable annuity that it offers via a prospectus that runs 132 pages would cost a minimum of 1.81 percent annually in one version and possibly a fair bit more.” AXA has not endorsed this review in any way, nor do I receive any compensation for this review. All deferred annuities provide tax-deferred growth potential, not just this one. All of this points to a serious lack of financial literacy from the people making the decision to select these plans. 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. agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. It doesn't apply to K-12 403b plans. They won’t charge you the $30 fee if your account value is $25,000 or more. A fee charged to process a hardship distribution. by tchasteen » Tue Feb 14, 2017 5:31 pm, Post Private Advisor Group and Warwick Valley Financial Advisors are separate entities from LPL Financial. AXA Equitable pays contribution-based and asset-based compensation to their agents. So, then you might select a Target Date Allocation Portfolio. Bonds are subject to market and interest rate risk if sold prior to maturity. But how good is the protection? 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. You see a $45,000 drop in your total account value, and your new account balance is now $105,000. Annual fee: 1% of the participant’s Personal Income Benefit account value. http://www.bankrate.com/calculators/ret ... lator.aspx, https://www.ohio457.org/iApp/tcm/ohio457/index.jsp, https://www.nytimes.com/2016/10/27/your ... .html?_r=1, http://board.403bwise.com/index.php?showtopic=6375, https://us.axa.com/docs/teacher-retirement.pdf, http://board.403bwise.com/topic/6361-li ... -platform/, https://prospectus.axa-equitablefunds.c ... =NA&d=1512, https://www.vanguard.com/pdf/403binvt.pdf, $25 per participant per year for ongoing enrollment plus, $12 per year for recordkeeping ($3 per participant per quarter) plus, 0.50% charges on all assets (0.49% program & 0.01% other), EQ/Equity 500 Index (0.36 + 0.50 = 0.86%) -- Large caps, 80% of US stocks, EQ/Small Company Index (0.37 + 0.50 = 0.87%) -- Small caps, 14% of US stocks, EQ/MFS International Growth (0.98 + 0.50 = 1.48%) -- International stocks, expensive, EQ/Core Bond Index (0.46 + 0.50 = 0.96%) -- US bonds, EQ/Equity 500 Index (.58% + 1.20% = 1.78%) -- Large caps, 80% of US stocks, EQ/Small Company Index (.64% + 1.20% = 1.84%) -- Small caps, 14% of US stocks, Russell 200 Index, EQ/Common Stock Index Portfolio (.70% + 1.20% = 1.90%) -- 98% of the investable U.S. equity market, EQ/Mid Cap Index Portfolio (.72% + 1.20% = 1.92%) -- S&P MidCap 400 Index, EQ/Core Bond Index (0.67% + 1.20% = 1.87%) -- US bonds, EQ/Intermediate Government Bond Portfolio (0.64% + 1.20% = 1.84%) -- US Government Bonds, EQ/International Equity Index Portfolio (0.81% + 1.20% = 2.01%) -- International stocks, most expensive of the "lowest cost" options, EQ/Short Term Bond Portfolio (0.81% + 1.20% = 2.01%) --. 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