Jackson Annuity Review

The Elite Access® II annuity from Jackson is a variable annuity that allows you to grow your funds on a tax-deferred basis. Of course, once you begin taking payments and withdrawals from the account, you’ll begin being charged income taxes. This can be integral to getting your retirement assets to the point to where you want them. In turn, it’s an annuity best served for those looking for long-term savings, as you’d have a harder time taking advantage of the tax deferral over a shorter period. The max issue age for this annuity is 85.

This annuity involves an investment platform whereby clients can play a major role in building their annuity portfolio. There are essentially four major parts to this system: equities, fixed income securities, alternative assets and alternative strategies. Investments such as fixed income and equities are fairly conservative. As a result, they have lower return potential but also less possibility for downside. On the other hand, alternative investment ideologies are a bit riskier, but offer the chance to gain stronger returns.

There are just about 100 different investments that clients can select from, with fees ranging from 0.53% to 2.41%. Out of those choices, though, you can only select as many as 99 investments. In order to fan the growth flames of your investments, Jackson allows clients to select either monthly, quarterly, semi-annual or annual rebalancing options, along with tax- and fee-free trades and transfers 15 days a year.

Fees

Many annuities include an annual contract maintenance charge, and the Elite Access® annuity is no exception. This fee is $50 for account holders in every state but New York, where the rate is $30. However, if you can manage to have an account or withdrawal value of at least $50,000, you can waive this annual charge.

There is also a 1.00% core contract fee included with this annuity. This is meant to protect Jackson from the many risks that annuitants, those who receive an annuity, present a company, while the latter is more clerical.

Jackson gives clients the option to withdraw up to 10% of their remaining premium payment, or the greater of their interest earnings, free of charge, once a year. You will be charged an annually declining 6.5%, 6%, 5%, 4% or 3% fee for any amount you withdraw past that initial 10%, until you’ve been an account holder for more than five years. At that point, all withdrawal fees are dismissed.

If you begin taking payments from your annuity before the age of 59.5, you may find yourself subject to a 10% bonus tax from the IRS.

Realistic Return Expectations

When attempting to figure out the return possibilities of an annuity, many factors come into play. This problem thickens when utilizing a variable annuity, as the areas of the market that your money is invested in vary drastically from annuitant to annuitant. Assuming that all of the above fees are charged to your account, and you make full withdrawals, the potential for growth seems promising. However, you can never be too sure when it comes to investments.

Like the above option, the Perspective II® is a tax-deferred variable annuity that also grants annuitants the ability to create their own investment portfolio. Over the last couple years, this annuity has become very popular around the country for its customizable features. It carries a maximum issue age of 90.

Hundreds of money managers have partnered with Jackson to afford clients ample choice in how they want their hard-earned funds invested. This will allow you to diversify your investments on a large scale, across classes like U.S. equities, international equities, alternative securities, bonds, money markets and more. As many as 99 investment choices can occupy your portfolio at any one time, although you are able to make up to 25 transfers a year free of charge. This is all done to set your annuity, and the money that you invest in it, on the path of long-term financial growth for retirement.

Should you have the desire to further amplify the strength of your Perspective II® annuity, Jackson offers optional living benefits and death benefits. Living benefits ensure that the annuitant will continue to receive payments for the rest of their life, while death benefits are focused on leaving beneficiaries your money for the future. However, these benefits are accompanied by an extra fee.

Fees

The most consistent fee you’ll come across with this annuity is the annual contract maintenance charge of $35, though this is waivable if your contract value is $50,000. There's also a 1.30% core contract charge and investment option fees that can range from 0.53% to 2.41%.

For the first seven years that you’re an account holder, any withdrawals you make past the 10% freely allotted amount are subject to a fee. This rate will decline for every year you get closer to fulfilling this seven-year requirement, starting at 8.5% and subsequently dropping to 7.5%, 6.5%, 5.5%, 5%, 4% and 2%.

Under certain circumstances, Jackson will allow you to withdraw money with no penalty. For example, if you need to stay at a nursing home for 90 days or more, you can take a one-time payment of up to $250,000. And if you’re diagnosed with an eligible disease, you can make a free withdrawal of up to 25% of your total contract value.

If you begin taking payments from your annuity prior to the age of 59.5, a possible 10% surcharge may be added to your income taxes.

Realistic Return Expectations

There are tons of return possibilities with the Perspective II® being that there are so many ways that a client can form its contents. But as a jumping off point, if your portfolio consists mostly of U.S. equities, returns seem to cluster around 5% to 10% over 10 years. In the same situation, allocation-specific portfolios seem to offer 2% to 6% growth.

MarketProtector, a fixed indexed annuity, is what some might deem to be the best of both worlds. At its core, this annuity provides fixed growth, as the day your account is opened, it’s placed in a fixed account. From this starting point, you can decide just how much of your premium and the interest it has earned you want to be transferred into a market-indexed option. If you feel uncomfortable with the balance you’ve struck between the two sides, don’t worry, you can move funds around on the anniversary of your index option’s creation. There is a maximum issue age of 85.

Being that the growth of your money is dependent on the performance of the index it’s connected to, it’s imperative you select the right one. In the case of MarketProtector, you can choose either the S&P 500® Index or the MSCI EAFE. The S&P is comprised of mostly U.S.-based equities, while the MSCI EAFE is centered more around international markets. It would be best to talk to your Jackson professional about this or a financial advisor.

To further solidify the reliability of this annuity, Jackson added a guaranteed death benefit. This should help provide you peace of mind that in the event of your death, your prespecified beneficiaries will be entitled to the full value of your account. Jackson also provides the optional “IncomeAccelerator” benefit that will afford you lifelong income from your annuity in any situation. 

Fees

There are fewer or no fees associated with a MarketProtector annuity, unless you decide to purchase the IncomeAccelerator benefit package. For this, there is a 1.10% (single) to 1.25% (joint) charge.

Besides this, a withdrawal charge may apply if you surpass the free 10% withdrawals from your accumulated value during certain time periods. Depending on the exact annuity you select, this will be either 5, 7 or 10 years. All three follow the same fee scale, just for varying periods of time. It goes as follows: 9.00%, 8.25%, 7.25%, 6.50%, 5.50%, 4.50%, 3.75%, 2.75%, 1.75% and 0.75%.

The IRS may impose an excess 10% income tax if you begin taking distributions before the age of 59.5.

Realistic Return Expectations

Jackson covers MarketProtector clients from major downturns in index values by ensuring that the ending value of your annuity never falls beneath your initial premiums. In fact, the only time during which this policy won’t perfectly apply is if you add on the extra benefit fees or begin taking withdrawals.

If you don’t have time to wait around for withdrawals, Jackson’s Immediate Annuity is likely your best option. With this, your $5,000 or higher initial premium will begin coming back to you within 12 months. Clients are entitled to choose from monthly, quarterly, semi-annual or annual payment schedules, allowing you to customize this annuity to your personal needs.

There are about 10 different payout styles that Jackson provides, with single and joint life income options being the main distinction throughout them. These benefits are entirely customizable, and you can enjoy them for anywhere from five to 60 years, or even  for for life. If inflation is a concern, you can choose to add on the Income Escalator® option, as this will annually increase your payments by 3%.

115 years old is the maximum issue age for this immediate annuity.

Fees

Like most immediate annuities, this contract does not have any annual fees.

Although the chance to do so is limited with the Immediate Annuity because of its short-term nature, taking withdrawals before you turn 59.5 years old will likely result in a 10% income tax jump.

Realistic Return Expectations

Jackson utilizes not only the size of your premium, but also your age, gender and other financial factors to determine what your payments will look like. For its most recent simulation, the company projects an annual benefit payment of nearly $5,900 for a man who invests $100,000 and selects the “Life Only” income option. In the same situation, a female is projected to receive a $5,530 payment.

Remember that state taxes may affect these totals. However, when it comes to annuities that non-retirement accounts fund, these taxes only apply to excess money you earn.