What’s Covered in this AXA Annuity ReviewIn this review, I will go over the following information on the Retirement Cornerstone AXA annuity:
- Product Type
- Current rates
- Realistic long term investment expectations
- How it is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in. We make the complex, simple.You may initially notice that like many other annuities, the AXA Retirement Cornerstone variable annuity can perform relatively well in certain situations. There are, however, other circumstances where it may not perform well – especially depending on what your particular goals for the annuity may be. Just like purchasing any other high-ticket item, it is important that you do your homework prior to making a commitment. This is especially the case when it comes to investing your hard-earned money in a financial product like an annuity. That’s because you could end up making a permanent mistake, which in turn, could impact your future income, and your overall retirement. That’s where we come in.
Annuity And Retirement Income Planning Information That You Can TrustYou might have stumbled across our website for the very first time and you don’t know much about us – but you have certainly come to the right place. If you have been Googling “annuities,” then it is very likely that you’ve visited annuity marketing websites that make some or all of the following bold claims in order to just simply collect your contact information:
- Highest Payouts
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- Guaranteed Income for Life
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- Get 7-8% Returns with NO Market Risk
AXA Retirement Cornerstone at a Glance
|Product Name||Retirement CornerstoneVariable Annuity|
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||AA- (Stable)|
|Phone Number||(800) 789-7771|
Opening Thoughts on the Retirement Cornerstone AXA AnnuityWith more than a century and a half in the insurance and financial services world, AXA Equitable Life Insurance Company (which is formerly the Equitable Life Assurance Society of the United States) offers a wide array of growth, income, and protection vehicles. This life insurer is part of the AXA Group, one of the largest financial services companies around the globe. Headquartered in Paris, France, the AXA Group operates and offers financial planning tools throughout the world. AXA Equitable has earned some very high ratings as it pertains to financial strength and claims-paying ability. These include a(n) A (Excellent) from A.M. Best Company, A2 (Good) from Moody’s, and A+ (Strong) from Standard & Poor’s. But, while that’s all well and good, these things won’t likely make any difference in how your variable annuity performs! Overall, a variable annuity is supposed to accomplish two primary tasks. These include growing principal, and producing income. However, the reality is that many variable annuities are not really all that good at producing retirement income. One of the key reasons for this is due to the risk that these types of annuities can present both to their investors, and to the insurance companies that offer them. Also, due to the fact that the value that is inside of a variable annuity tends to fluctuate so much, it is not unusual for an insurance carrier to guarantee a lower amount of income from variable annuities. This can be true – even though a variable annuity can offer the opportunity to earn higher growth than safer options such as fixed annuities. Therefore, for every dollar that an investor places inside of a variable annuity, it could realistically promise less in terms of income than a fixed annuity would for the same amount of deposit. And, because of this, if the primary objective for an annuity is future retirement income, a variable annuity might not be the very best alternative. In addition, with regard to using a variable for growing principal, it can offer you an opportunity for high returns. For instance, in the case of the AXA Retirement Cornerstone annuity, this financial vehicle offers access to a fairly comprehensive array of more than 100 different investment options – all managed by well-known money managers. This can help with enhancing the accumulation potential. But, due to the variable annuity’s exposure to the market, these financial vehicles will also carry with them a fair amount of downside risk, too. Also, a variable annuity will usually charge a number of fees to their investors. For example, what many people may not realize is that on top of the fees that are charged for the annuity itself, there are also management charges for the mutual fund investments that are placed inside of the annuity. Due to all of the fees – combined with the market volatility risk – it can become somewhat of a challenge to obtain a high return with a variable annuity.
Before we get into the gritty details, here are some legal disclosures…This is an independent review of the Retirement Cornerstone Variable AXA annuity. Because of that, this review does not include any recommendation to either purchase or sell an annuity product. AXA has not endorsed this annuity review in any way, nor have we received any type of compensation for providing this review. The information is simply meant to be an opinion so that readers can view my personal perspective when determining the potential advantages and the potential drawbacks of this particular annuity product – as well as whether it may or may not fit in with their financial goals. Prior to purchasing any type of financial product or service, it is important that you pursue your own due diligence, as well as consult with a properly licensed and competent financial advisor before you move forward. In doing so, you may then more precisely ensure that the product or service that you are considering may fit with your circumstances. All of the trademarks, names, and materials that were used with this annuity review are the property of their respective owners.
How AXA Describes The Retirement Cornerstone Variable AnnuityBased on details from AXA’s website and the Retirement Cornerstone prospectus, this AXA annuity is described as a vehicle that can offer the ability to not only accumulate but also to protect retirement income. It offers two separate accounts, each with distinct features that help investors with addressing different goals. For accumulating funds, the AXA Retirement Cornerstone annuity provides access to more than 100 different investment options. These are all managed by various well-known money managers. The annuity also helps investors in protecting retirement income by allowing the ability to choose to fund the guarantees that offer a minimum amount of income for life, regardless of market performance. This, however, will cost an additional amount of premium to the investor. As your needs change over time, the assets that are held in this annuity may be transferred from the Investment Account to the Protected Benefit Account. The AXA Retirement Cornerstone annuity actually offers three ways to potentially raise your retirement income. These include a(n):
- Market-Based Increase – Living benefits on an annuity can oftentimes offer a way to capture potential gains in the market. The Retirement Cornerstone annuity provides the opportunity to do so each and every year.
- Interest Rate Based Increase – With the annuity’s benefit base growth – or “roll-up” rate – income may even increase in a down market. In this case, for example, if interest rates rise, the annuity offers the potential to withdraw a higher dollar amount – up to 8% – of the benefit based without having an effect on the benefit. But, if interest rates fall, there is still a guarantee of a minimum income amount.
- “Whatever You Don’t Take, You Make” option – Each year, withdrawals may be made equal to the 10-year Treasury plus 1% from the protected benefit account using the Guaranteed Minimum Income Benefit.
How Financial Advisors Might “Pitch” This AXA AnnuityThe AXA annuity offers many different professionally managed investment options to choose from. Therefore, it is probable that a financial advisor will include this information when discussing the annuity with a client. One reason for this is because the many different investment alternatives can help with diversifying the annuity’s underlying sub-accounts in order to provide a more diversified portfolio, depending on the annuity owner’s financial goals and needs. Another key aspect of the AXA Retirement Cornerstone annuity that is likely to be discussed by a financial advisor when pitching this particular annuity is its Guaranteed Minimum Income Benefit option. This can help an investor to protect retirement income. However, this benefit will cost an additional premium amount. It is important to keep in mind, though, that if you plan to use this AXA annuity – or any of the many variable annuities that are on the market today – as a primary source of retirement income, you should take the time to examine the annuity closely. This is because, due to the potential risk to principal, there can be an effect on the amount of income that you will actually end up receiving – or, in order to guarantee a certain amount of annuity income, it will cost you more in premium. Also, even given the annuity’s well-diversified array of investment options – more than 100 in total – it will still have a certain amount of market exposure. So, prior to moving forward, it is essential to keep in mind just how much risk you are willing to take, as well as your overall goals for the annuity that you are purchasing. If you’re wondering if the AXA Retirement Cornerstone annuity is right for you, or if you have questions and need a little help getting pointed in the right direction; just reach out via our secure contact form here. Because insurance and financial salespeople tend to show products only in their best light, it can oftentimes be helpful to read testimonials from people who have actually purchased the product in order to learn more about how it did – or did not – work for them. With that in mind, you can check out a long list of AXA annuity complaints, reviews, and customer testimonials HERE.
What About the AXA Retirement Cornerstone Annuity’s Fees?There will also be fees involved when purchasing an annuity – and in many cases, a variable annuity can be exposed to higher fees overall. This is because of the fees that are charged by the annuity itself, as well as the fees that are charged by the investments, such as the mutual funds’ management fees, inside of the variable annuity. With regard to the AXA Retirement Cornerstone annuity, there are three different options that you can choose. For example, if you were to opt for the Series B, which is a deferred annuity, you would incur a total annual contract fee of 1.30% per year, as well as an annual administrative charge of either $30 or 2% of the annuity’s account value – whichever is less for the first two years, and then $30 per year thereafter. (This fee is, however, waived if the account value is more than $50,000). Additional riders that are included with this annuity will incur additional fees. You can check out all of the investment options that are available with the Retirement Cornerstone Variable AXA annuity – as well as their corresponding fees – HERE. There are also surrender fees that could be incurred if you decide to withdraw your money from this annuity during the first seven years. These start at 7% during the first two years of contract ownership. They gradually grade down to 1% in Year 7, and then finally go to 0% in Year 8. Be sure that you read over all of the updated fine print that comes with this annuity so that you aren’t surprised by any “hidden” charges that could impact the overall return that you get. You can do so by going to the back of the Retirement Cornerstone brochure HERE. It can also be helpful to read over actual customer reviews of this AXA annuity so that you can get a better idea of how the product is – or isn’t – performing for other investors. In the case of this annuity, while there are some AXA Retirement Cornerstone annuity complaints by and large, the reviews have been positive.
The Annuity Gator’s End Take on the AXA Retirement Cornerstone Variable AnnuityWhere it works best:
- If you are considering the AXA Retirement Cornerstone annuity, it may work best for those who want to be invested for market growth – and also want the opportunity to diversify funds – along with having the opportunity for retirement income in the future. This is because the Retirement Cornerstone annuity provides the option for investing in more than 100 different investments, all in a variety of different investment classes, and all via professional asset managers.
- In addition to potential growth and asset management, this AXA annuity will also provide the ability to obtain tax-deferred growth on funds that are inside of the account. So, if you have already maxed out your 401(k) retirement plan and/or IRA account, this can offer you another avenue for obtaining tax-deferred investment growth without an annual maximum contribution.
- Also, a variable annuity – just like any other annuity – can be a good option for those who may be concerned about outliving savings or income in the future. This is because an annuity can offer a guaranteed income stream.
- However, because of the long surrender fee period on the AXA Retirement Cornerstone annuity, it is important to be aware that this should be considered as a long-term financial endeavor and that the funds that go into this annuity should not be funds that will be used as your “emergency funds” for potential future needs.
- If you are not intending on using the income benefit on this AXA annuity, then it might not be the ideal vehicle – and other, more suitable financial options should be considered. This is because, due in large part to the high fees that can be incurred inside of the annuity and from the mutual funds, it can be a costly way to invest and there are certainly less expensive alternatives that are available.