Let's examine variable annuities to determine if they are right for you. Or should they be fixed?
(At this point, you should know if your variable annuity will be immediate or deferred.)
Let's examine this annuity closer...
As with any annuities, this arrangement is with an insurance company who provides the guarantee of payment (s) to you in exchange for your principal.
This annuity allows for a variety of investment options. You are provided funding options that you can choose from. There are similarities to mutual funds...
The difference is that you deal with the insurance company, or financial advisor, and not a wall street broker or other entity.
If the funding options do well, then you benefit more than a fixed annuity...
However, if the funding options do not do well, then you risk your earnings and principal suffer accordingly.
Let's summarize this and other features:
- You choose among funding options (similar to mutual funds).
- You may be able to split your capital between investment sources.
- They are not taxed until you make withdrawals (check with your tax advisor).
- There are some fees and expenses which your advisor will detail out.
- There are payout options to your beneficiary in the event of death.
- Provides the opportunity to make more than fixed annuities.
Variable Annuity Calculator
Use the variable annuity calculator to help you see how this may work out for you. There are some unique attributes to this annuity that provide some guarantees to your interest and principal.
Be sure to ask your financial advisor about any available options for your annuity. There is the possibility that you may be able to split your capital between high- and low-risk options.
If you are the type to watch over your principal regularly then this may be right for you. This option allows you to make changes in your investment options from one source to another...
As long as your funds transfer between sources, then there are no tax issues on interest made. But as always, check with your tax advisor to be certain you understand how to operate within the options you choose...
The tax deferral benefits normally outweigh the annuity costs, especially if the annuity is held for a long term.
Work Out Your Goals
This should now be clearer for you in your retirement financial planning.
Work out your goals and determine which type of annuity makes the best sense for your situation. You should also... Get a free annuity quote - let us help guide you through the options to make the best choices!
Or, get a free consultation from a Certified Financial Planner to go over your plans to help you make the
best decision for your needs.
You'll be glad you did!
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