New York Life Annuities Review

The New York Life Premier Variable Annuity - FP Series is a variable annuity, meaning the funds in your contract will grow based on what you choose to invest in. There are a multitude of funds available to invest in, including funds managed by large investment companies like Fidelity, PIMCO, Invesco, Morgan Stanley and more. These funds focus on many different types of investments, including international and domestic stocks, bonds and alternative investments.

The death benefit associated with this contract is equal to the greater of your contract's account value or the money you've invested, minus withdrawals and fees. Beyond that, New York Life will afford you a one-time step-up death benefit if you compelte your initial surrender charge period. Should you be able to do this, your death benefit will then become equal your account value on your most recent account anniversary if that amount is higher than either of the potential death benefits above.

The maximum issue age for this annuity is 80 years old. The minimum initial premium is $5,000 for non-qualified accounts and $2,500 for qualified accounts.

Fees

Variable annuities are the most expensive type of annuity. This contract comes with a $30 annual contract fee, though you can waive this if your account value reaches at least $100,000. There's also a combined mortality, expense risk and administrative annual fee that's equal to 1.00% to 1.30%, depending on what kind of contract you open.

A number of the benefit riders available through New York Life come with their own fees. Additionally, the funds you invest in have portfolio operatng expenses, which can range from 0.42% up to 1.96%.

Annuitants are allowed to withdraw up to 10% of their account value annually. However, if they surpass that mark, a surrender charge will accompany the withdrawal.

If you withdraw from your annuity before age 59.5, the IRS will hit you with a 10% income tax penalty. This is in addition to your standard income tax rate.

Realistic Return Expectations

Variable annuities earn returns based on the market performance of specific investment funds. Therefore, their returns are basically impossible to predict. The fee structure associated with this contract is fairly standard, though, so there's no reason you wouldn't see solid returns if your investments perform well.

New York Life’s Clear Income Fixed Annuity - FP Series is a lifetime fixed deferred annuity that is somewhat pricey, but offers some solid benefits. You can open it as either an individual or joint account. A minimum investment of $50,000 is required to open one, which is significantly higher than most of its counterparts. The money you place in this annuity is then subjected to a seven-year interest rate lock. 80 years old is the maximum issue age for this annuity.

The size of your premium is the driving force behind what rate you receive, as there are three total tiers: $50,000 to $99,999, $100,000 to $1,499,999 and $1,500,00 and up. Unfortunately, New York Life currently does not release its fixed rates for these bands. When you begin receiving payments from your annuity, you can elect to receive them monthly, quarterly, semi-annually or annually.

The Guaranteed Lifetime Withdrawal Benefit rider is automatically paired with this annuity. This rider takes your initial premium and retitles it your “income base.” On the anniversary of your contract’s creation, your income base is credited an annual increase at a 5% rate. This goes on for as many as 10 years or until you begin taking withdrawals. Your payments are subsequently determined by your income base’s value, along with the age at which you choose to receive them.

The accumulation value of your annuity will be passed on to your beneficiaries when you pass away. If it’s a joint account, your partner becomes the sole owner.

Fees

Although riders are typically optional, the Guaranteed Lifetime Withdrawal Benefit rider associated with this annuity is required. Even still, a 0.75% fee is charged every year for it. Other than this, there are no other annual or clerical fees.

New York Life employs a number of qualifying free withdrawal offers. If you go over them, a surrender charge will apply. If you exceed these limits in years one to three, a 7% fee is charged. After that, a 6%, 5%, 4% and 3% fee is levied during the fourth, fifth, sixth and seventh years, respectively.

59.5 is the age where you can begin taking payments from an annuity without tax implications. If you start earlier, the IRS may impose a hefty 10% bonus income tax.

Realistic Return Expectations

The withdrawal rates of the Clear Income Fixed Annuity is contingent on your age when you begin taking payments and whether your account is individually or jointly owned. Unfortunately, New York Life does not release the rates for this contract. Generally speaking, your rate will be higher the more you invest.

The Secure Term Choice Fixed Annuity II is reminiscent of the Secure Term MVA Fixed Annuity II, but with possibly stronger interest-earning potential. While its interest rates are slightly lower, its introduction of the Interest Opportunity Rider (IOR) has the opportunity to push you over the edge, provided you’re willing to take on a little risk. The maximum issue age for this annuity is 90 years old.

With the IOR, you have two options to select from: one that offers a 0.5% rate increase and another that can gain you as much as 1% interest. To trigger these rate hikes, the Treasury rate must increase by an equal percentage (0.5% or 1%) on the semi-anniversary or anniversary of your policy. For the 0.5% option, this must occur during the first year, while the 1% option gets the first two years to reach that point. The upgraded rate will then last for the duration of your guaranteed period, which is either three, four, five, six or seven years.

This annuity also comes with the Enhanced Beneficiary Benefit Rider for a 0.30% annual fee, as well as the Enhanced Spousal Continuance Rider. This will allow your spouse to become the new owner of your policy as long as he or she is your sole beneficiary.

Fees

There is no administrative or annual contract fees associated with the Secure Term Choice Fixed Annuity II. But this annuity does limit your upside with the interest rates it offers. Because of the IOR, your rates are lowered. The Enhanced Beneficiary Benefit Rider comes with a 0.30% annual charge, though.

New York Life has set up a number of withdrawal regulations for those who want to pull money from their account. The company says you can withdraw the greatest of the following: 10% of the current accumulation value, 10% of the accumulation value as of the last policy anniversary or 100% of the gain earned in the policy if the account is worth more than $100,000. If you go beyond those margins, the fees below await you:

Annuitants younger than 59.5 years old who choose to take withdrawals may find themselves paying an additional 10% income tax fee, courtesy of the IRS.

Realistic Return Expectations

Because your interest rates are categorized by the size of your premium and the term length you choose, they inherently affect your eventual return potential. Depending on your specifics, these rates will apply:

The New York Life Secure Term MVA Fixed Annuity II earns interest on term-by-term basis of either three, four, five, six or seven years, depending on what you decide is best. Your initial premium payment, the size of your growing account and other factors come together to form the exact interest rates you are given. Once the term you chose is up, a renewal rate will be applied that’s no less than the guaranteed minimum interest rate (GMIR) listed in your annuity agreement. The max issue age for this fixed deferred annuity is 85 years old.

The “MVA” in this annuity’s title stands for market value adjustment, and it’s only used when an annuitant makes a withdrawal above the no-fee limit. New York Life describes the formula that determines the MVA as one “that measures the change in the U.S. Treasury Constant Maturity yield, plus the applicable Bloomberg Barclays U.S. Corporate Bond Index” from the original issue date to the excess withdrawal date. So if the MVA turns out to be higher than the day you bought your annuity, the value of your account or your withdrawal could drop. But if it’s lower, you may receive a financial boost to either or both.

The Living Needs Benefit/Unemployment Rider is included with all Secure Term MVA Fixed Annuity II accounts at no charge. This safety net makes it so annuitants in specific circumstances can gain access to their funds at a moment’s notice. Eligible situations include living in a healthcare facility for 60 consecutive days, receiving state unemployment benefits for 60 consecutive days, having a total or permanent disability that precludes you from working for a year straight and other similar conditions.

For an annual charge of 0.30%, annuitants can add on the Enhanced Beneficiary Benefit Rider. This post-death benefit will allow you to leave part of your money for your beneficiaries to help offset expenses like taxes after you’re gone. The Enhanced Spousal Continuance Rider is automatically included in this package, as it allows your spouse (if your sole beneficiary) to take over your annuity policy following your death.

This annuity does include a death benefit as well. Should you pass away before your account is annuitized, the beneficiaries that you selected beforehand are given the policy’s full accumulation value, minus the MVA.

Fees

Aside from the 0.30% optional rider annual fee, there are no charges associated with this annuity. However, you will need to watch out for charges in the event the you surpass any of the following limits when making a withdrawal: 10% of the current accumulation value, 10% of the accumulation value as of the last policy anniversary or 100% of the gain earned in the policy if the account is worth more than $100,000. These charges go as follows:

Annuitants younger than 59.5 years old that choose to take withdrawals may find themselves paying an additional 10% income tax fee, courtesy of the IRS.

Realistic Return Expectations

As stated earlier, the interest rates associated with the Secure Term MVA Fixed Annuity II are based not only on term length but also your premium’s size. The table below illustrates New York Life’s current rates:

One of the New York Life annuities is the Guaranteed Lifetime Income Annuity II, an immediate annuity funded by a single premium of at least $10,000. This style of annuity is perfect for any risk-averse retirees looking to avoid the turmoils of the market. It can be had as either an individual or joint account and promises to pay out for the duration of you and your joint annuitant’s life. The maximum issue age for this annuity is 95 for non-qualified annuitants and 89 for qualified annuitants.

You can choose to receive distributions from this annuity either monthly, quarterly, semi-annually or annually. There are also five different styles of payout, including “Life Only,” “Life with Period Certain,” “Life with Cash Refund,” “Life with Installment Refund” and “Life with Percent of Premium Death Benefit.” The specifics within each of these options are different, such as determining how beneficiaries are treated, so feel free to select the one that best suits your needs.

There are also a few withdrawal features that you can take advantage of, like Payment Acceleration. This allows those with non-qualified policies to receive six months worth of payments in one month as one lump sum, making it very similar to an advance. You can also choose from optional benefits, including annual increases to help account for inflation, a changing needs option to adjust your payments based on your updated financial situation and more.

Fees

Similar to most immediate annuities, the Guaranteed Lifetime Income Annuity II has essentially no fees associated with it. In certain situations, if you begin taking payments prior to age 59.5, the IRS may add a 10% tax hike to any existing charges.

Realistic Return Expectations

Immediate annuities are meant to help you accumulate income. Instead, this contract is designed to provide lifetime income. However, if you happen to outlive your premium, you could end up gaining money.