MetLife Annuities/Brighthouse Financial Annuities Review

Variable annuities with FlexChoice Access from Brighthouse Financial are great for individuals and couples who want to maintain a steady stream of income for life. Variable annuities allow customers to create a set of diversified investments for themselves. Depending on what your prefer, Brighthouse lets you pick between either prebuilt portfolios or individual investment options. The better these perform, the more your money will grow. The maximum issue age for these annuities is 85.

If you decide to purchase the FlexChoice Access rider and your annuity reaches a point where it’s empty, the company will continue paying what it calls lifetime income payments. If you are opening a joint account with your spouse, the age of the oldest between the two of you will determine the income percentage you receive. If you pass away, your spouse will continue receiving payments.

Initially, your premium payment dictates your “benefit base,” which will be used to formulate your eventual distributions. Brighthouse will then compound your benefit base by 5% each year for the first 10 years of your contract’s life, as long as you don’t make a withdrawal that year. So if you were to make the minimum payment of $10,000, that could develop into an almost $11,600 benefit base over three years.

When you begin taking money, you’ll get to decide between either “Level” or “Expedite” withdrawals. Choosing Level affords you the same payments for the lifetime of your contract, whereas Expedite is a front-loaded deal, meaning your lifetime withdrawals after your account is depleted will be lower.

Fees

These variable annuities call for a 1.30% mortality, expense and administration charge and a 0.53% to 1.67% fund expense fee, which is ultimately decided by the size of your annuity. There’s also a $30 annual contract fee, although accounts with more than $50,000 don’t need to pay it.

FlexAccess comes with its own fees, including 1.35% and 0.65% charges for living benefits and death benefits, respectively. Withdrawal charges can also get as high as 7% if you don’t let your account mature enough.

If you decide to go against federal government regulations and begin taking payments before you are 59.5 years old, the IRS may impose an extra 10% income tax charge.

Realistic Return Expectations

The withdrawal rates associated with this annuity are split between the aforementioned Level and Expedite styles. They each use an age-based scale to produce percentages, with separate tiers assigned to 59.5- to 65-year-olds, those older than 65. For those who choose Level, rates begin at 3.75% and reach 4.75%, whereas Expedite rates range from 5% to 6. There are separate rates for lifetime income, though.

The Brighthouse Fixed Rate Annuity is a much safer (but less rewarding) choice than the variable annuities above, as the Brighthouse Fixed Rate Annuity receives fixed interest rates that are not reliant on investments in the market. This is a tax-deferred account, meaning that you won’t have to pay income taxes until you start taking withdrawals from the annuity. You choose from either three-, five- or seven-year initial guaranteed rate periods, depending on your personal retirement plans. Once this is up, the company will renew your contract every year at the current renewal rate for that time. This annuity carries a maximum issue age of 85 and minimum premium of $25,000.

This deferred annuity comes with an optional Principle Guarantee Rider that you must select at the time of issue. This rider protects you by ensuring that when your account is fully withdrawn, you will have received no less than your premium back. While this might seem like a no-brainer, Brighthouse affords lower initial interest rates for annuitants who tack on this service.

There are two main styles of guaranteed income available with this annuity: Fixed Life Annuity with 10-Year Guarantee Period and Fixed Joint and Last Survivor Annuity with 10-Year Guarantee Period. These are dependent on whether or not your account is owned by just you or both you and another individual. The first option provides income on a fixed schedule for at least the next 10 years of your life, whereas the second choice offers guaranteed payments over 10 years for the life of both you and your co-annuitant.

Fees

Annuitants can make withdrawals, but only within certain thresholds sets by Brighthouse. For example, you cannot take out more than 10% of the money from your account, or you’ll face withdrawal charges. These start at 7%, although they diminish as you get further into the life of your annuity, eventually falling to zero once your initial guaranteed rate period has come to a close. The lone exception is the three-year term, where that 7% rate lasts for all three years.

Should you be placed in a nursing home for 90 consecutive days or are diagnosed with a terminal illness and given a year or less to live, Brighthouse will allow you to empty your annuity free of withdrawal charges and other fees (must be 80 or younger).

Although this is a tax-deferred account, income taxes play an integral role in how much you truly earn from an annuity. However, while some form of taxes are inevitable, simply waiting until you are at least 59.5 years old will enable you to skip out on the IRS’ 10% bonus income tax.

Realistic Return Expectations

Aside from which guaranteed rate lock period you select, the size of your account will help to formulate your interest rate. So if your account is larger than $100,000, you’ll be eligible for an enhanced rate. Here's what you can expect to receive:

• No Principal Guarantee Rider
  • 3-year: 1.05%
  • 5-year: 1.15%
  • 7-year: 1.20%
• Includes Principal Guarantee Rider
  • 3-year: 1.00%
  • 5-year: 1.05%
  • 7-year: 1.10%

The Brighthouse Income Annuity calls for just a $5,000 initial investment, making it an extremely accessible way to achieve income for the rest of your life. As a matter of fact, you can start receiving payments within the first year of your contract’s life on either a monthly, quarterly semi-annual or annual basis. This simplistic style is great for anyone who’s risk-averse, as it eliminates any reliance on investments. The maximum issue age is 90.

There are five different variations of payments to choose from, including Lifetime Income, Lifetime Income With Cash Refund, Lifetime Income With a Guarantee Period and Income for a Guarantee Period Only. The first three are all similar in that they provide payments for the rest of your life, and in the case of lifetime income with guarantee period and lifetime income with cash refund, your beneficiaries will continue to receive money past your death. However, for those who choose income for a guarantee period only, payments can only be had for between five and 30 years, regardless of when you pass.

Should you feel it’s necessary, Brighthouse does offer the Increasing Income Option to counteract inflation. With this, you’ll have an additional 2% to 4% added to your payments every year.

Fees

There are basically no extraneous costs involved with an immediate annuity such as the Income Annuity. However, while income taxes are imminent for most people, you can avoid the extra 10% charge the IRS levies against account holders who take withdrawals before they reach 59.5 years old.

Realistic Return Expectations

In order to illustrate the return potential for this annuity, Brighthouse did a case study based on a initial premium of $100,000. For this, a male who chooses the lifetime income payout option will receive $388.68 at 60 years old, $438.66 at 65, $512.66 at 70 and $629.69 at 75. Because women have longer life expectancies, their earnings are slightly lower in the same situation: $373.52 at 60, $418.36 at 65, $482.69 at 70 and $582.51 at 75.

The Guaranteed Income Builder, a deferred income annuity, is like a pension plan for those that don’t have access to those services. In other words, these types of accounts are guaranteed for life in three different styles: lifetime income, lifetime income with cash refund and lifetime income with guarantee period (5-30 years). If you’re looking for the highest payments possible, the base lifetime income option is your best choice. For the latter two selections, your beneficiaries will be given the balance of your annuity upon your death.

The size of your eventual income payments are decided not only based on your age and initial premium. The amount of time that passes between the creation of your account and the day you start getting checks is also taken into consideration. Because of the predictability of these factors, it’s extremely easy to determine what you’ll need in retirement and prepare a situation where you can meet those requirements. The Increasing Income Option is available with this annuity as well, featuring a 2%, 3% or 4% anti-inflation payment increase.

The max issue age for this annuity is 82.

Fees

There are no annual contract fees with the Guaranteed Income Builder annuity.

If you receive withdrawals before you turn 59.5 years old, you may see a 10% income tax hike added onto your checks. So if you can, wait as long as possible before you begin taking payments.

Realistic Return Expectations

Because Brighthouse offers limited specifics about the return potential of the Guaranteed Income Builder, it’s impossible to stipulate exactly what your annuity payments could look like in the end. Plus, these types of annuities aren't generally used to gain the most returns from an investment. To get more information, it would be best to contact the company directly.

The MetLife Retirement Income Insurance® QLAC (qualifying longevity annuity contract) was created to aid those who feel as though they may outlive their current retirement assets. This can be a terrifying prospect, hence why plans like these are titled “longevity insurance” in industry jargon. The maximum issue age for this QLAC is 85, and the minimum premium is $10,000.

Customers of this QLAC will receive payments for life, and these distributions are not dependent on the market, as they are calculated at a fixed rate. The Lifelong Income for You® option affords lifetime payments for just you, whereas Lifelong Income for Two® makes it so you can tack on an annuitant partner (typically a spouse). You can select either monthly, quarterly, semi-annual or annual payments, and they can be sent to you either via direct deposit or paper checks.

Fees

There are no fees to worry about with the Retirement Income Insurance® QLAC.

Realistic Return Expectations

MetLife does not disclose a system by which it formulates annuitants’ payments, so it’s tough to tell exactly what the return potential of the Retirement Income Insurance® QLAC is. But because of the long-term nature of this plan, the company does provide inflation protection of up to 3% annually.