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Are My Investment Fees Too High?

Sept. 30, 2013
Investing, Retirement Planning
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Dear Anisha: 

I have a Perspective L Series Fixed and Variable Annuity with Jackson National Life. I do not understand the fees:

  • Mortality and Expense Charge – 1.55% per year
  • Administration charge – 0.15% per year
  • Total asset-based charges – 1.7% per year

Is this too high?


Dear P:
According to the SEC, your fees are slightly above average. M&E fees are usually about 1.25%. Your administrative fees are at the average of 0.15%.

But typically, you’re charged fees on top of M&E and administrative fees. In December 2012, the average expense ratio for variable annuities (M&E + Admin + Fees) was 2.28%.

“Fixed and Variable” annuities are less standard, so I’m not sure whether they create reasonably higher returns, which might justify the fees. But there are definitely really inexpensive variable annuities which would be a better option otherwise (for example, Vanguard’s variable annuity has a total expense ratio of 0.58%).

If your plan is not specifically listed as an IRA, it’s probably not an IRA. I suggest that you also include your question on our Financial Advisor platform, where licensed CPAs give free tax advice for situations such as yours.

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