Excellent points on your presentation. It is no surprise then that Jackson National Lifes Perspective II contract together with their LifeGuard Freedom Flex is the top selling retail variable annuity amongst independent financial advisors, according to Morningstar. Jackson is committed to providing education, service support and digital tools to increase the ease of doing business through a new product offering. If the Allianz annuity was purchased within an IRA, you cannot 1035 exchange it into a non-qualified annuity. Hope that answers your second question. Jackson is one of the top annuity companies in the United States. How is this possible? The high fees on this annuity, which were 3.39% with the features in the video, cause the Perspective II annuity to be a poor vehicle for growth. The second and fourth quarters can be found in the Funds semi-annual and annual report respectively, using the links provided on this page or atconnect.rightprospectus.com/Jackson. I am 71 and have no children (2 step-children). Listen to free podcasts to get the info you need to solve business challenges! Very important to people that are entering retirement age now or soon and dont have time to make up for loses if the market tanks again. I have read as much as I can about investment products to help fund my retirement but I am still at a loss as how to wisely invest my money to accomplish my two goals. If they are extremely risk averse they could just stick their after-tax funds in a portfolio consisting of cash, short term income securities, and laddered bonds. People in the market for this annuity would not be getting market like returns, further skewing the results. 10 to 20 years in the future, interest rates are likely to be higher and fixed annuities would likely offer more attractive fixed interest rates. Unfortunately, most retirees are not told that the guarantee is a hypothetical account that is used to determine their income, whereas their walk-away-money (the surrender value) will fluctuate with the markets and withdrawals. Since pretty much every market has been booming the past couple of years, any type of investment that is linked to the financial markets will have done well. Indeed, Jackson offers 99 different investment funds, and they are all fair game. What you see in the video is the running calculation of the spreadsheet thats essentially asking if the maximum value of the income base should be bumped up to a higher maximum value. Today a mutual fund that is tax efficient may be a better alternative. If the rates go up, you can bump your rate up (after the 1 year anniversary) one time a year. The expense for the LifeGuard Freedom Flex rider with an Annual Step-Up, 7% Bonus, and optional income upgrade is 1.50%. Not everyone investing in these vehicles plan to be 100% equities are they? Dieter, If the running value of the income base net of withdrawals exceeds the previous high water mark, the income is adjusted upwards to a new high to reflect that. So now well go over fees, and after that Ill show you the break down and stress test of the annuity. Perspective II Fixed and Variable Annuity (R) Product ID: 26 Vendor: Jackson National Life Ins. The calculation for the income and the income base is correct, the way its displayed however can be a bit confusing. Theyhave evolved over the years into a successful multi-billion-dollar organization, have lived by the mantra that no matter wherethejourney takes them,theywill never forget wheretheycame from. Today, the situation is quite different. In an extended version of this column at www.ifid.ca,, I strongly urge policyholders to take on the maximum risk allowable inside the policy and thus extract the maximum value from the guarantee. So, for example with the Lifeguard Freedom Flex if you pick the 6% or 7% bonus values, the 200% step up will never be used because the guaranteed rate of return for the income base is 0.05% higher for the 6% bonus and 1.05% higher for the 7% bonus. So if you could do this by November 26, it would really help. Why havent you responded with another hypothetical closer to their request? This grants policyholders a significant option that is valuable and quite rare. The point of the annuity review is to educate people about the annuity so that they have a better idea about how it performs through time before they purchase it. The joint-life withdrawal factors, which cost an extra 15 to 40 basis points, will be applied based on the younger covered life. They now have huge income liabilities that they must cover. Annuities are issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York, by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Additionally you will lose any protected income balance you currently have in your Hartford account because these are separate from the annuitys cash value. The investment I compared it to was the S&P 500. Cant combine house and TSP into one account. For the optional death benefit riders, the Lifeguard Freedom Flex DB for example, its generally the higher of the net premiums you invested in the contract (premiums withdrawals and premium taxes), the contract value, or the GMDB Benefit Base (pretty much the same as the income base, but may have had a smaller guaranteed bonus, depending on the option you choose. Early in your review of the Jackson Perspective II Annuity you comment that no retiree would put all of their assets into stocks. All names, marks, and materials used for the reviews on this site are property of their respective owners, and not those of AnnuityEdu.com. Im also using a 100% allocation to stocks in the annuity because its allowed and it allows the annuity to grow its income base more quickly, rather than the more typical allocation which includes bonds and less risky assets which do not increase the value of the income base as much. As for tax management strategies, you have a few options to reduce your taxes during retirement and avoid RMDs, I can walk you through some on the phone if youd like. The CSV had plummeted, but rallied recently where it was nearly equivalent to the GWB. The only increase to the contract value of the account comes from contract enhancements between 2% and 5%, which cost a further annual fee of between 0.395% to 0.695% and a further recapture charge in addition to the surrender charges. If the growth is less than the withdrawal, the death benefit always stays the same. The $105,000 is the amount you could walk away with. If someone is aware of all of the facts prior to purchasing such a contract, I think theyll be happier in the long run because reality is more likely to align with their expectations. Two, to ensure that I leave a large part of the purchase price to leave to my heirs. I have a guaranteed income of 6% of the high water mark, starting at age 75. The Portfolio ROI is invested directly in the S&P. I do have a few concerns though, and hope you can straighten me out. I think I understand what happens if you annuitize, you have choices like any annuity on survivorship, but it seems there a lump sum option for say the children of the spouse if the DB option is kept intact, if so how much? Were dedicated to helping you with a second opinion viewpoint so to help you see through some of sales pitches that arent what they seem. The Form N-PORT may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. Im still being attacked for not being objective, despite going out of my way to do so and show the annuity with an allocation that is designed to increase the income base and thus the guaranteed income amount, the most. A surrender charge is a way for the insurance company to recover the costs of the commission they pay and it decreases over time. 3). May 01, 2011 at 08:00 PM Hope this helps. So I plan to update the post with a new video soon to reflect the changes. In this Annuity Review. With complicated financial products its tough to go through all of the data and model it all out. Thanks for the article. I would also not charge 2% on a buy and hold portfolio in general. For more information about how we utilize cookies and vendors to deliver online advertising, please see our Website Privacy Practices. This annuity thinking they are earning the 5% Guaranteed and theyre not. 6% growth, 5% income, 100% of my premium back as a death benefit to my kids as long as i keep one dollar in the contract. Im glad that youre happy with your purchase. The SEC regulates registered investment advisors, who are classified as fiduciaries when dispensing advice, whereas FINRA regulates financial representatives (annuity salespeople, broker dealer representatives, etc. De-risk the unprotected portfolio, and take on as much risk allowable in the insured one. I just want investors to have realistic return expectations for this or any other annuity. Explore JNAM Registered index-linked annuities The Jackson National Perspective II annuity has the following features. if you think your earnings 5% its likely your earning much less when the cash flows are calculated. As someone who knows this product intimately first i want to say you referenced several calculations and features incorrectly. The latest maturity date or income date allowed under an annuity contractis age 95, which is the required age to annuitize or take a lump sum. The potential problem to consider is investing too conservatively inside this model. Jacksonis the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company, and Jackson National Life Insurance Company of New York. I am not sure how to get income from my money for the next almost 4 years and also cover healthcare. Im glad it was so informative for you. You should have an independent financial planner give you an objective opinion about whether an annuity is right for you and explore better ways to protect your savings while generating reasonable returns. One cannot invest directly in the S&P, so there are fees attached. You should maximize the utility of the annuity to the investor. 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