Jackson National Perspective II with Lifeguard Freedom Rider 7 Review
This review is meant to show you the strengths and weaknesses of the Jackson National Perspective II with lifeguard freedom rider 7 review. As with all annuities, they work very well doing some aspects and poorly at other aspects. I’ll walk through the details of how this annuity works, so you can know what to expect.
- Product Type
- Investment options that are available and their realistic long term investment return expectations
- Understanding the income rider
- How it can best help you as part of your financial plan
- How it’s poorly used as part of your financial plan
Jackson National Perspective II with lifeguard freedom rider 7 Variable Annuity Quick Facts
|Perspective II Variable Annuity
|Jackson National Life
|Type of Product
|Standard & Poor’s Rating
|“AA” (Very Strong)
Did your Agent say that you’ll earn 7% Guaranteed no matter what the market does?!
If so, you have to read this review…
The Perspective II Annuity will guarantee you lifetime income. On the other hand, there’s a withdrawal rate and guaranteed lifetime rate that people are getting confused with. The 7% Rollup Rate is not money you can just walk away. Advisors and agents often use the 7% Rollup as a sales tactic but the real rate of return isn’t figured or disclosed by agents and advisors. However, 7% Guaranteed or the market can sound pretty tempting but don’t bite until you know real numbers. In the Annuity Review, we’ll break down the important numbers you need to know before making this decision.
There are a few ways that Agents might pitch this product
- Guaranteed lifetime income
- To get 7% growth and pursue market upside
- Be able to withdraw 5% for the rest of your life no matter what the market does
- Able to be in the stock market while at the same time have guaranteed lifetime income.
Is any of this true?
In a broad sense it is, there are important details you should be aware of. In this review we will help you understand the numbers you need to consider.
You can learn more by downloading the prospectus by clicking here Prospectus download
Many retirees have been forced into risky investments due to low interest rates. Variable Annuities with guaranteed income riders such as the Jackson National Perspective II with lifeguard freedom rider 7 Annuity have been very popular in recent years. These Annuity guarantees however come at a cost. Often these costs are worth it but in others they’re not. It can depend on your risk tolerance, financial objectives, and time frame. This review is designed to help give you more information so you can decide whether it’s worth it for you.
Welcome to AnnuityEdu where you can find unbiased annuity reviews, a perspective you can trust.
If it happens that you’re on this website for the first time. We’re dedicated to helping you with a second opinion viewpoint so to help you see through some of sales pitches that aren’t what they seem. We hope with the information we provide you’ll be better educated to make an informed decision before you buy.
Before we go into detail, here is an important disclosure
Jackson National Perspective II with lifeguard freedom rider 7 Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. Jackson National has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances. This is not specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.
Information on Jackson National
Jackson National Life Insurance Company® (Jackson®) first opened for business in 1961 as a small family-owned company. They have evolved over the years into a successful multi-billion-dollar organization, have lived by the mantra that no matter where the journey takes them, they will never forget where they came from. By combining the responsiveness and personal attention of a family business with the resources and strength of a large corporation, they are able to provide a unique experience to customers and partners.
If I’m not earnings 7% guaranteed what is the rate of return that the Income rider guarantees’ me?
In this section were going to break down how much value that Income Rider adds and what rate of return the income rider 7% Guarantee truly provides. You’ll be disappointed if you’re expecting the income rider to provide the 6 or 7% growth to maintain your lifestyle. Remember the 7% growth depends on your specific model and year you bought. It’s not money you can walk away with. But its guaranteed increase in your income value. Let’s break down the numbers.
For example, You’re age 65, put this annuity in, and you plan to defer for 5 years until age 70 and then begin taking withdrawals or “income”. Remember the withdrawals are reductions of principal and any gains for the year if any. This is not interest. There’s a difference. You put $1,000,000 in this annuity. After deferring it for 5 years your income base value has increased to $1,350,000 million and now want to begin taking income. At age 70 in this example the person is guaranteed 4.75% withdrawal for the rest of their life which is $64,125. After withdrawing $64,125 for 20 years. They’re now age 90. They’ve received total payments of $1,282,500. ($64,125 X 20 years). This means they’ve earned 28% from their income rider in 25 years. They put in 1 million and received a $1,282,500.
This is less than 1% annually!
Often, they’ll illustrate performance from 1987 which is biased. The late 80’s and 90’s had some of the best performance in stock market history. If this performance isn’t repeated the illustrations would be completely different. This shows how you really didn’t earn 7% in those years. It was a trick the insurance company played on you. Run a financial plan so you can see through the smoke and mirrors. This is something we can help you do for free here at annuityedu.com, just reach out to us and ask. Our mission is to help retirees educate themselves so they can make the best decisions for their retirement and not the insurance companies! This annuity may still have a role, it depends on your overall circumstance, risk tolerance, and rate of return you need in retirement.
Understanding the Surrender Charge
The Jackson Perspective II
The freedom to choose. Jackson has over 90 investment options to choose from and does not limit you. This is definitely a strong point on this variable annuity. This is good for investors. The potential problem to consider is investing too conservatively inside this model. Especially when choosing the income rider. The higher fees and lower returns more conservative allocations can make, it’s likely that the returns you experience will not keep up with inflation.
An Important aspect about this Jackson Perspective II Annuity for fixed Income Allocation.
What are some of the benefits of the Jackson National Perspective II with lifeguard freedom rider 7 Annuity?
The benefits of the base annuity mortality and expense charge also known as M&E of 1.15% and administration charge 0.15%. The total cost of this annuity is 1.30% annually. The Lifeguard Freedom Flex that adds the 7% rollup add an additional 1.5%. That brings the expenses up to 2.8% annually. We haven’t discussed the fee’s inside the funds. The funds have expenses ranging from 0.55% to a maximum of 2.18%. If we assume an average expense of 1.20%, that brings the total expenses for the annuity to 4% annually! It’s for this reason to make sure that this annuity is appropriate for you. It can be hard for an account to perform with a 4% drag. Also note that Jackson National has the option to increase the fee on the rider upto 3% annually from 1.5%. At the higher rider expense, total expenses would be approximately 5.5% annually.
Are you considering a Conservative, Moderate or Balanced allocation within the Annuity with the Lifeguard Freedom Flex 7?
If so this is a must-read section.
Due to the high fee’s it’ll be difficult to make money in the conservative allocation especially with the rider. If growing your capital base is important to you while taking income then continue reading. Interest rates are low if your fixed income portfolio is earning 2% but paying over 3% in fee’s. You’ll be losing 1% in that portfolio of your retirement. Investors might do this to reduce volatility but you want to ask yourself if you’d prefer to lose 1% on that portion, maintain a long-term view, and knowing that the guarantees of the annuity are there in the worst-case scenario.
The fixed income portion losses will affect the total performance in a negative way.
Current aggregate bond index is earning around 2-2.5%. We’re not sure how long rates will stay this low so it’s something to consider especially if you want to grow your principal. For this reason this annuity will perform best when weighted more aggressively in equities. While having more money in equities can create more volatility. The income rider guarantee is most valuable when invested aggressively.
The Jackson Lifeguard Freedom Flex 7 isn’t as valuable when invested more conservatively.
If we’re going to have a feature that’s costing you money but it guarantees you lifetime income your minus will grow. If the stock market were to experience a great depression loss of 90% and didn’t recover for a long period of time, that Income Rider would help dramatically. So it’s up to your investment to make up for the fees and go for the upside while you can. The income riders’ value comes in its ability to allow you to withdraw 5% as long as you live. Remember you can pull 5% out of a cash investment earnings 0% for 20 years before withdrawing all your principal.
Where it works Best:
- Producing a pension like lifetime guaranteed income stream.
- Those looking for moderate capital appreciation but in which guaranteed lifetime income is important.
- Conservative investors who need guarantees to dip into stock market based investments
Where it works Worst:
- Those looking to have high levels of capital appreciation
- Who want maximum capital appreciation
- For those who want minimal volatility and may choose conservative investment options
AnnuityEdu’s Summary on the Jackson National Perspective II with lifeguard freedom rider 7 Annuity
Overall, Jackson National Perspective II with lifeguard freedom rider 7 has some good features and some important aspects that you need to understand before buying. The largest problem I have is that retirees are likely buying this annuity thinking they are earning the 7% Guaranteed and they’re not. These annuities will typically earn much less than the 7% return. The fees can be a large drag on performance. So, consider that when reviewing your retirement income strategy. Understand the rate of return you need in retirement. Then you can see about positioning investments to reach the rate of return you need to live the lifestyle of your dreams!
If your financial plan says you need 7% annually in retirement don’t think you can buy Jackson National Perspective II with lifeguard freedom rider 7 and earn 7% guaranteed and all the investing and Retirement planning you need to do is done. You’ll need a comprehensive retirement income analysis that factors inflation, taxes, and your investment positioning to see if the annuity adds value to your retirement. Get a Retirement Income Analysis. It’s something we do for free here at Annuityedu.com.
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This will show the true rate of return of the annuity in your specific circumstance, and help you understand your retirement strengths, weaknesses, and opportunities. And also, help you decide whether an annuity is right for you and which annuity types are best for your needs. If you’re within 1-10 years of Retirement this type of Analysis is important and a must for anyone who is serious about retirement. Don’t have an insurance agent plan your retirement and if you did at least get a 2nd opinion.
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We hope you found it helpful as you’re conducting your own research on Jackson National Perspective II with lifeguard freedom rider 7. We hope you enjoy a plentiful retirement.
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All the best,
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