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Why flat insurance-fee VAs? The simple, low-cost solution to save more for retirement.
When it comes to retirement, the more you accumulate, the more income you can generate. So if you're committed to building long-term wealth, then you're already maximizing contributions to traditional tax-deferred plans such as a 401(k), IRA and Roth IRA.
But, tax laws limit yearly contributions. And limited contributions now means less income during retirement years.
You can contribute thousands more—even millions more—and defer taxes while those savings grow.
How? The right variable annuity can help. You can grow more assets tax-deferred than an IRA or 401(k), trade tax-deferred among subaccounts, and secure a retirement income stream.
But for years, traditional VAs have been criticized for expensive asset-based fees that can erode principal and reduce performance.
The Wall Street Journal notes a growing trend—Annuities Lighten Up: "Just as the first ranks of baby boomers prepare to cash out their 401(k)s, annuities—one of the most popular retirement investments—are getting reconstructive surgery. Amid pressure from regulators and consumer complaints about complexity, new entrants are reshaping the way annuities are priced and sold."
The most significant development? Flat insurance-fee variable annuities. A simple low-cost way to save for retirement, flat insurance-fee VAs eliminate all the expensive asset-based fees and complicated riders of a traditional variable annuity and simply charge one flat insurance fee no matter how much you invest.‡
Why flat-fee variable annuities? Americans can take back billions
Right now, Americans with traditional VAs are paying more than $15 billion in insurance fees alone.1 If every consumer who owns a traditional VA exchanged it for a flat insurance-fee VA, they could take back billions of dollars in unnecessary fees and put that money back into principal, where it belongs, to save more for retirement.
Now there's a simple VA that charges one flat insurance fee of $20 per month, no matter how much you invest3 while eliminating asset-based insurance fees, commissions and surrender charges. Like other variable annuities, the customer pays fees of the underlying funds selected (currently ranging from 0.23% - 2.72%; except for Rydex VT Inverse Gov't Long Bond Strategy Fund which is currently 5.12%) plus the fees of any advisor hired. The range of underlying fund fees reflect the minimum and maximum charges after contractual waivers that have been committed to through at least May 1, 2008. This variable annuity does not provide any enhanced living, guaranteed death or withdrawal benefits.
This new flat insurance-fee VA offers simple low-cost tax deferral while providing 4X more fund options than the typical VA4, including standard investments and more esoteric options such as commodities, real estate, currency products and hedge-like funds.† It is designed to provide you with a low-cost tax-deferred investment platform—instead of a costly insurance contract—so you can save more and reach your goals faster.
So how does the flat fee of $20 per month stack up? Based on the industry average5, a typical $100,000 VA contract costs $1,350 per year in insurance charges. A $250,0002 VA costs $3,375. A flat insurance-fee VA, is just $240 per year regardless of account size.3 What's more, on a $50,000 contract, $240 per year is lower than 99% of all other VAs. On a $100,000, it's the absolute lowest on the market.6
Maybe that's why, when the flat insurance-fee VA was launched, the respected personal finance columnist Humberto Cruz was quick to point out "From time to time—not often enough for me—financial products come out that actually fill a need."
Why flat insurance-fee variable annuities? Not all annuities are created equal
Industry watchdogs and consumer advocates alike are ready to tell you why variable annuities—with their high costs and complicated features—are a confusing maze of smoke and mirrors. But not all VAs are created equal.
Flat insurance-fee VAs can potentially help consumers save substantially more for retirement than an IRA or 401(k), and help secure a retirement income stream. Today, with roughly 76 million baby boomers nearing retirement, while pension plans rapidly decline and Social Security is the big unknown, there's a growing need for a solution like flat insurance-fee VAs.
Think you could benefit from a flat-insurance fee VA? There is a simple, unbiased online tool using the latest data from Morningstar® to compare virtually any competing variable annuity—985 different products from 117 companies—versus Jefferson National's Monument Advisor. Take the "Annuity Rescue Challenge" to see how much more you can save and how much more your annuity can grow.
The Annuity Rescue Center is powered by Jefferson National, which developed the first flat insurance-fee variable annuity. For more information, visit www.jeffnat.com or call 1-866-WHY-FLAT (866-949-3528).
FORM #JNL2007CL070 04/07
‡ Jefferson National's Monument Advisor charges a $20 flat insurance fee with no transaction fees on more than 97% of underlying funds. Jefferson National also makes available ultra low-cost funds on a transaction fee basis ranging from $19.99 to $49.99 per transaction, depending on the number of transactions per year. See the prospectus for details. Like other variable annuities, the customer pays fees of the underlying funds selected (currently ranging from 0.23% - 2.72%; except for Rydex VT Inverse Gov't Long Bond Strategy Fund which is currently 5.12%) plus the fees of any advisor hired. The range of underlying fund fees reflect the minimum and maximum charges after contractual waivers that have been committed to through at least May 1, 2008.
† These are speculative investments and carry a high degree of risk, including the possible loss of benefits. Read your prospectus carefully before making an investment decision.
1 Based on $1.35 trillion in variable assets according to NAVA and Morningstar quarterly data reported as of 12/31/2006 and average insurance charges of 1.35% of assets per year based on Morningstar data as of 12/31/2006.
2 $250,000 is the average Monument Advisor contract as of 12/31/06.
3 Minimum contribution $25,000. Deposits in excess of $10 million are subject to company approval.
4 The average variable annuity has 38 underlying fund options according to Morningstar data as of 12/31/06.
5 Morningstar, 12/31/06.
6 Morningstar, 12/31/06.
An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. For a prospectus containing this and additional information, please contact your financial professional. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.
Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.
Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawal of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice. Annuities are not deposits or obligations of, or guaranteed by any bank, nor are they FDIC insured.
Monument Advisor is issued by Jefferson National Life Insurance Company (Dallas, TX) and distributed by Jefferson National Securities Corporation, FINRA member. Policy series JNL-2300-1, JNL-2300-2.
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