Hi All:
I offer this post to share what I recently learned about the above and, perhaps, to vent a bit. Part of the title was taken from a post by Stinky, which reads in part: "Realize that the fees on the VA [Variable Annuity] will keep grinding away on all of the money in the VA until funds are withdrawn. You might want to review the contracts and fund selection to see how much these contracts are costing you each year. It may be a very unpleasant surprise." I just experienced that surprise. BTW, thank you, Stinky, for all the information you provide; it has helped a lot.
Today, I reviewed the funds ("sub-accounts") in which proceeds from inherited Lincoln and Fidelity annuities are housed. These are equity and bond index funds. Here is what I found.
1. You have to work hard to get expense information. These sub-accounts are identified by name. Example: LVIP SSGA S&P 500 Index. Clicking on the name on the Lincoln website does not lead to expense information. After a lot of work, I found what I needed.
2. Fees on Lincoln's funds are higher than fees on similar Schwab, Vanguard, etc. funds (albeit not in annuities). The fee for Lincoln's LVIP SSGA S&P 500 is .42%.
3. Surprisingly, fees on Lincoln's funds are higher than fees on similar Fidelity funds. For example, Fidelity charges .12% for its total domestic stock market fund.
4. On top of those fees are, of course, the annuity company's own charges called "mortality and expense risk expense" (a mouthful) and "administration expense." These vary company to company and within a company depending on how big the annuity is.
5. On top of all those fees is the fee charged by the "agent" or "broker" or "representative" who sold the annuities and who usually offers to help manage them after the annuitant's death. I arranged to manage what I inherited on my own, which is fairly easy on Fidelity but very difficult on Lincoln which has limited number of things one can do on line.
So, lots of surprises. For those considering annuities, you might want to factor in what those who inherit them might encounter.
Good luck to all.
I offer this post to share what I recently learned about the above and, perhaps, to vent a bit. Part of the title was taken from a post by Stinky, which reads in part: "Realize that the fees on the VA [Variable Annuity] will keep grinding away on all of the money in the VA until funds are withdrawn. You might want to review the contracts and fund selection to see how much these contracts are costing you each year. It may be a very unpleasant surprise." I just experienced that surprise. BTW, thank you, Stinky, for all the information you provide; it has helped a lot.
Today, I reviewed the funds ("sub-accounts") in which proceeds from inherited Lincoln and Fidelity annuities are housed. These are equity and bond index funds. Here is what I found.
1. You have to work hard to get expense information. These sub-accounts are identified by name. Example: LVIP SSGA S&P 500 Index. Clicking on the name on the Lincoln website does not lead to expense information. After a lot of work, I found what I needed.
2. Fees on Lincoln's funds are higher than fees on similar Schwab, Vanguard, etc. funds (albeit not in annuities). The fee for Lincoln's LVIP SSGA S&P 500 is .42%.
3. Surprisingly, fees on Lincoln's funds are higher than fees on similar Fidelity funds. For example, Fidelity charges .12% for its total domestic stock market fund.
4. On top of those fees are, of course, the annuity company's own charges called "mortality and expense risk expense" (a mouthful) and "administration expense." These vary company to company and within a company depending on how big the annuity is.
5. On top of all those fees is the fee charged by the "agent" or "broker" or "representative" who sold the annuities and who usually offers to help manage them after the annuitant's death. I arranged to manage what I inherited on my own, which is fairly easy on Fidelity but very difficult on Lincoln which has limited number of things one can do on line.
So, lots of surprises. For those considering annuities, you might want to factor in what those who inherit them might encounter.
Good luck to all.
Statistics: Posted by Former BH Lurker — Mon Jan 29, 2024 9:28 pm — Replies 1 — Views 72