Fee Only Variable Annuities

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tj
Posts: 2109
Joined: Thu Dec 24, 2009 12:10 am

Fee Only Variable Annuities

Post by tj » Fri Sep 14, 2018 10:04 am

I noticed that Nationwide has an annuity product that costs $20/month. This would seem to cost less than even the Vanguard variable annuities.

https://www.nationwideadvisory.com/prod ... nt-advisor

I know a lot of folks are trapped in crappy annuities or permanent insurance policies, they could theoretically 1035 into this which includes Vanguard funds.

Unfortunately, this seems to be marketed to RIA's rather than direct to the public, so presumably an RIA would need to tack on their own markup. How would one find a cost efficient RIA who uses a product like this to salvage existing annuities?

nervouscorps
Posts: 36
Joined: Sun Jan 05, 2014 8:01 pm

Re: Fee Only Variable Annuities

Post by nervouscorps » Fri Sep 14, 2018 2:30 pm

The devil is in the details-- if you read the prospectus, there are additional fees when you select low fee funds for the Nationwide Annuity (anything under .35). You end up paying a minimum of .52 total.
Vanguards fee's are .15 but their funds expenses are around .40. So around .45 total
Fidelity's Personal Retirement Annuity is .25 (.15 if you have over 1M) but their index funds are now very cheap, .12 or .14. so around .37-39 total. So it looks like Fidelity may win here expense wise.

bsteiner
Posts: 3427
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Fee Only Variable Annuities

Post by bsteiner » Fri Sep 14, 2018 3:38 pm

In addition to the costs, in a taxable account the income and gains become ordinary income.

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