What’s Covered in this ReviewIn this review, I will go over the following information on the Pacific Life Pacific Odyssey annuity:
- Product Type
- Current rates
- Realistic long term investment expectations
- How it is used
- How it is most poorly used
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You may initially notice, that like many other annuities, the Pacific Life Pacific Odyssey 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.
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:
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Pacific Life Pacific Odyssey at a Glance
|Product Name||Pacific Odyssey Variable Annuity|
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||A+ (Strong)|
|Phone Number||(800) 722-4448|
Opening Thoughts on the Pacific Life Pacific Odyssey Variable AnnuityIn general, variable annuities are designed for performing two tasks. These are growing principal in the account, and then, at a later time, producing income. But, in truth, a variable annuity is really not that good at producing income. This is due in large part to the fact that these annuities can present a market-related risk to their investors, as well as to the insurance carriers that offer them. In addition, because the value of variable annuities tends to move around so much, it is not uncommon for an insurance carrier to provide a lower income amount from variable annuities than they do from the fixed annuities that they offer – even though fixed annuities are considered to be a “safer” alternative. Given that, for each dollar that is invested into a variable annuity, it very well could provide you with a lower amount of future retirement income than would a fixed annuity – even for the same amount of deposit. With that in mind, if your key goal for an annuity purchase is to have future retirement income, then obtaining a variable annuity to do this may not be your very best option. In regards to owning a variable annuity for the growth of principal – here, these vehicles can offer you the opportunity for a nice return. For instance, with Pacific Life’s Pacific Odyssey variable annuity contract, it offers a number of professionally managed investment options, along with the ability to transfer among various funds with no tax consequences, and tax-deferred growth. But, due to the fact that your funds are also exposed to the market in this variable annuity, your money will also be exposed to downside risk if there is a market downturn. Also, variable annuities are known for charging a number of fees to their investors. These come from the annuity itself in the form of management and administrative charges, as well as from various rider charges (if applicable), and also from the fees that are charged within the various investments such as mutual funds that are inside of the annuity. All of these fees, combined with market volatility, can make it somewhat difficult to earn a high return in a variable annuity.
Before we get into the gritty details, here are some legal disclosures…This is an independent annuity review. Because of that, this review does not include any recommendation to either purchase or sell an annuity product. Pacific Life 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 our 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 Pacific Life Describes The Pacific Odyssey Variable AnnuityPacific Life’s Pacific Odyssey variable annuity is described as a long-term contract that can help investors to grow, protect, and manage retirement savings in a tax-advantaged manner. It can do so through tax-deferral, as well as through the diverse selection of investment options, free of tax consequences. This annuity is also described as one that is for those who are working with fee-based advisors, as there are no front-end sales commissions paid by Pacific Life when an advisor offers this particular annuity. There are also no back-end surrender charges. This annuity also offers asset rebalancing, so that the investor’s investment option allocations are periodically adjusted in order to keep the portfolio in line with their original investment strategy, without tax consequences.
How Financial Advisors Might “Pitch” This AnnuityThe Pacific Odyssey variable annuity offers some nice features, so it is likely that several of these would be highlighted by a financial advisor when offering the annuity to a client. For example, one of the main features is the ability to transfer funds among a diverse selection of investment options, free of tax consequences. The annuitant can also leave a financial legacy via a guaranteed death benefit. While this annuity does also offer the ability to convert to a lifetime income (although there is no requirement that there be a lifetime income benefit attached), it is important to point out that if you plan to use the Pacific Odyssey – or any variable annuity – for guaranteed lifetime income, then you should ensure that you closely examine the annuity prior to moving forward. This is because, due to the potential risk to principal in the market, there can be a risk to the amount of future income that you will actually end up receiving. Therefore, if guaranteed retirement income is your key goal for obtaining an annuity, then there may be other annuity options that can better fit this need. In addition, even with the diversification and the ability to transfer funds among various investment options that are offered by the Pacific Odyssey annuity, there will still be exposure to the market’s ups and downs. So, here again, you will really want to determine just how much market risk you want to take prior to committing to this variable annuity. If you’re wondering if this 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.
What About the Pacific Life Pacific Odyssey Annuity’s Fees?In terms of fees, variable annuities can often be an expensive product – and the Pacific Life Pacific Odyssey variable annuity does have some fees that you need to be aware of – even without having an up-front sales charge. Here, you will still have an annual Mortality and Expense Risk fee of 0.30%. (This goes up by an additional .20% annually if you choose to have the stepped-up death benefit rider). Other riders will also incur additional premium charges as well. In addition, what many variable annuity investors may not realize is that, in addition to just the annuity fees, each of the investments (i.e., mutual funds) that are within the annuity will also have its own management fee, too. So, this can turn out to be quite an expensive way to invest.
The Annuity Gator’s End Take on the Pacific Life Pacific Odyssey Variable AnnuityWhere it works best:
- When deciding on whether or not the Pacific Life Pacific Odyssey variable annuity can be a good option, it can often work best if an investor wants to be invested in the market, and also wants the ability to stick with their objectives by maintaining balance in their account – while at the same time being able to convert over to a stream of lifetime income in the future.
- In addition, as with other annuities, the Pacific Odyssey allows for tax-deferred growth. So, if an investor has already deposited the annual maximum into their employer-sponsored retirement plan, as well as into an IRA account, then this can provide for another avenue of tax-advantaged investing.
- In addition, this annuity does offer a good option for anyone who is worried about outliving their income or savings in retirement, as it provides a guaranteed lifetime income. This can be accessed by a single or a joint income recipient.
- If an investor does not intend to use the lifetime income benefit on the annuity, then it could be that this won’t be the ideal product – and other, more suitable products should likely be considered.
- This is because, due in large part to the high fees that can be incurred inside of the variable annuity, as well as within the mutual funds, it can be a pretty costly way to invest in equities – and there are certainly less expensive ways to go about doing this.