Anyone Heard of AXA?

[NWBenefitProvider]

I am 39 and have a variable annuity through Phoenix Life. It is not performing well and I was thinking of 1035 exchanging it to a different company. I have a friend who is a financial planner and he recommends a variable annuity from AXA. Specifically it is their Retirement Cornerstone 13 which has some guaranteed benefit riders I can add. Expense ratio is similar to my current, but if I added riders like 4% guranteed and such, it would add about 1% in additional fees.

Can anyone guide me a little on if this is a bad move? We are looking at just under $200,000 and I do not need the money in the near future, it is sort of a safety net. I also do not need the death benefit. I just want to set it somewhere and not have it eaten alive by inflation or fees. Can anyone give a little insight?

Thanks!

 

[goillini52]

I am 39 and have a variable annuity through Phoenix Life. It is not performing well and I was thinking of 1035 exchanging it to a different company. I have a friend who is a financial planner and he recommends a variable annuity from AXA. Specifically it is their Retirement Cornerstone 13 which has some guaranteed benefit riders I can add. Expense ratio is similar to my current, but if I added riders like 4% guranteed and such, it would add about 1% in additional fees.

Can anyone guide me a little on if this is a bad move? We are looking at just under $200,000 and I do not need the money in the near future, it is sort of a safety net. I also do not need the death benefit. I just want to set it somewhere and not have it eaten alive by inflation or fees. Can anyone give a little insight?

Thanks!

Tyler

AXA S.A. is a French global investment, retirement, and insurance group headquartered in the 8th arrondissement of Paris. AXA is a conglomerate of independently run businesses, operated according to the laws and regulations of many different countries. The AXA group of companies engage in life, health and other forms of insurance, as well as investment management. The group operates primarily in Western Europe, North America, the Asia Pacific region, and the Middle East.

The AXA Group encompasses five operating business segments: Life & Savings, Property & Casualty, International Insurance (including reinsurance), Asset Management and Other Financial Services.

Damned French!!!

 

[sman]

I am 39 and have a variable annuity through Phoenix Life. It is not performing well and I was thinking of 1035 exchanging it to a different company. I have a friend who is a financial planner and he recommends a variable annuity from AXA. Specifically it is their Retirement Cornerstone 13 which has some guaranteed benefit riders I can add. Expense ratio is similar to my current, but if I added riders like 4% guranteed and such, it would add about 1% in additional fees.

Can anyone guide me a little on if this is a bad move? We are looking at just under $200,000 and I do not need the money in the near future, it is sort of a safety net. I also do not need the death benefit. I just want to set it somewhere and not have it eaten alive by inflation or fees. Can anyone give a little insight?

Thanks!

AXA has been around a long time. Certainly nothing wrong with them as a company. However, there may be better options available to you. Meaning carriers with better riders if that's what you're looking for. Or possibly a different investment. Personally, the only time I recommend a VA is for risk management purposes (i.e. - a guaranteed income with upside potential). However, there is a very big cost for such benefits.

While no one here will be able to tell you if this is the right move or not, what we may be able to do is help you better understand your options so you can make a more informed decision. Let's start first with whether or not this is qualified money? If it's non-qualified you are likely stuck in an annuity unless you have a very high cost basis.

Second, is the income feature something which appeals to you? One percent may not sound like much, but over the next 25 years it can cost you a large amount of money.

Let's just start with those two questions and go from there.

 

[NWBenefitProvider]

It is now non-qualified money from what I understand. I have already taken the initial money out, so this is gain or whatever you want to call it. If I just grabbed it, I'd pay capital gains on it I think, since the original annuity before this was pre-tefra or something. Either way, I am resigned to it being stuck in the annuity world, so no worry about trying to fre it for another investment. Therefore, the surrender charges are not a big concern, sinced i have no need for this money for quite a long period of time. I'd just like to pick the best in the annuity arena.

I do like the idea of having a guaranteed income stream, even if it is small, just in case other retirement vehicles do not pan out as planned. The Phoenix annuity I am in is an underperformer and has a 6 year step up, which is not so good.

I'm mostly concerned about getting swindled into something I don't understand. My expertise is employee benefits, not annuities. At the earliest I would look at tapping this at age 65-67, but maybe not until even later. Does this help at all?

 

[sman]

It is now non-qualified money from what I understand. I have already taken the initial money out, so this is gain or whatever you want to call it. If I just grabbed it, I'd pay capital gains on it I think, since the original annuity before this was pre-tefra or something. Either way, I am resigned to it being stuck in the annuity world, so no worry about trying to fre it for another investment. Therefore, the surrender charges are not a big concern, sinced i have no need for this money for quite a long period of time. I'd just like to pick the best in the annuity arena.

I do like the idea of having a guaranteed income stream, even if it is small, just in case other retirement vehicles do not pan out as planned. The Phoenix annuity I am in is an underperformer and has a 6 year step up, which is not so good.

I'm mostly concerned about getting swindled into something I don't understand. My expertise is employee benefits, not annuities. At the earliest I would look at tapping this at age 65-67, but maybe not until even later. Does this help at all?

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.

 

[NWBenefitProvider]

The fees that I know of with the Phoenix are 1.25%. How does one calculate or view an illustration that represents the difference between going with a super low expense product versus one with the higher expenses, but has the guarantees?

I like the low expense side of things, but then you are really are participating in the full ups and downs of the market. I already have $$$ in stocks and mutual funds and don't want to worry about losing much value of this asset. Therefore, it is attractive to know that their is a 4% bottom so that even if the market tanks I'll still have some growth. If the market does well, I'll still participate and earn more, but just not as much as maybe my straight stock portfolio.

Is this a far too simplified way of looking at this? Are there any other good carriers I should look at for a guaranteed min % regardless of the market?

I appreciate the responses so far, this is just way over my head.

 

[sman]

The fees that I know of with the Phoenix are 1.25%. How does one calculate or view an illustration that represents the difference between going with a super low expense product versus one with the higher expenses, but has the guarantees?

I like the low expense side of things, but then you are really are participating in the full ups and downs of the market. I already have $$$ in stocks and mutual funds and don't want to worry about losing much value of this asset. Therefore, it is attractive to know that their is a 4% bottom so that even if the market tanks I'll still have some growth. If the market does well, I'll still participate and earn more, but just not as much as maybe my straight stock portfolio.

Is this a far too simplified way of looking at this? Are there any other good carriers I should look at for a guaranteed min % regardless of the market?

I appreciate the responses so far, this is just way over my head.

I assume you are talking about the M&E charge with Phoenix Life. That isn't the only expense with a VA. You also have the management expense of the investment and then the cost of any riders.

As you talk about what you are wanting the investment to do, it doesn't sound like a VA is for you. Can you tell me what product the AXA plan is? I don't know of ANY annuity product which has a 4% floor in regards to actual return. There are certainly some index annuities with 4% caps, but that isn't a guarantee return. There are VA's with guarantees for incomes, but not returns.

I think we need to clarify the product you are considering with AXA so we're on the same page.

 

[NWBenefitProvider]

Their Retirement Cornerstone 13. Tomorrow at my office I can scan one of the pages that shows the highlights of the product and the riders.

 

[sman]

Their Retirement Cornerstone 13. Tomorrow at my office I can scan one of the pages that shows the highlights of the product and the riders.

This is a VA and there is no guarantee return. It appears what they guarantee is a 4% credit to the protected benefit which pertains to what your guaranteed income is based on.

The contract has an M&E charge of 1.65%. The underlying sub-accounts have expenses which range from 0.95%-1.31% (based on a person choosing to go with the protected benefit). So this means your expenses are 2.60% - 2.96% before you add the guarantee withdrawal benefit which is at 1.15% and can go as high as 2.30%. So now you're around 4% minimum. This means your investments have to exceed 4% for you to realize a positive return.

There is no downside investment protection. Meaning you can lose money. The protection only pertains to how much income you can withdraw.

If you're looking for something that can't lose money, this isn't it. No VA is going to guarantee that. You might want to explore other options.

 

[VolAgent]

You sound like a prime candidate for a FIA. You get growth with no chance of going backwards, assuming no rider. The catch is you won't get all the upside, but then you won't lose when the market goes down.