This is not the kind of list that you want to land on.
February 22, 2023 by Sheryl J. Moore
This is not the kind of list that you want to land on.
However, Brian O’Connell with TheStreet suggests that VA fees are one of the “worst” fees that consumers pay.
Click to read Brian’s Money Experts Say These Are the Worst Consumer Fees.
Interesting to see VAs lumped into a list with bank overdraft fees and ATM fees, considering that most American’s haven’t even heard of annuities, but I digress…
He says, “variable annuity fees are as bad, if not worse than 401k plan fees.”
I’m no expert on 401(k) fees, but Stuart D. Boxenbaum suggests “Fees on 401k plans are usually one of the highest because, typically, there are money manager fees, along with trading charges and administration fees.”
For the record, the total annual expense on a variable annuities today ranges from 0.00% – 1.90% annually (this excludes fund fees, which would depend on the funds chosen, as well as optional rider fees). Ultimately, the average total annual expense on the products is 1.05% plus any fund or rider fees.
Interestingly, Boxenbaum goes on to say “typical fees on a fixed indexed annuity can be in the 1 to 1.5% range annually.”
Huh?
In actuality, indexed annuities don’t have fees. There are indexed annuities with optional features that have fees, varying between 0.10% – 1.50% annually, but these average 1.03% annually.
I’d love to hear if anyone in my network has credible information on typical 401(k) fees. Having a rough time comparing VA fees to those assessed against them…