AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.

Weighing the variables: is a variable annuity for you? Depends on who's pitching it.(Personal Finance)

Entrepreneur

| March 01, 2003 | Nelson, Scott Bernard | COPYRIGHT 2003 Entrepreneur Media, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Financial services companies and the brokers who love them just can't get enough of variable annuities. In the days when stocks were hot, VAs were pitched as the ideal way to capture the upside of equities while deferring taxes. Now that Wall Street has become a dirty word, VAs are instead being sold as a no-lose proposition in which you're protected when stocks fall.

Both descriptions are accurate, though incomplete. They conveniently fail to emphasize the disadvantages embedded in the hybrid insurance-investment product. Chief among them are high fees, punishing withdrawal penalties, gimmicky--and pricey--options and enough complexity to stump your accountant.

That doesn't mean there isn't a place for VAs in your portfolio, however, especially with companies continually devising new variations. Specifically, VAs are worth considering for people who have already stuffed every penny possible into 401(k)s, SEPs, SIMPLEs, Keoghs, IRAs or other tax-deferred plans.

Annuities are intended to create a stream of income policyholders can never outlive. You give an insurance company money in a lump sum or in payments over a period of years, then at retirement, the cash gets "annuitized," or paid out in a string of payments based on your life expectancy. Between the time you pay the ...

Related articles from newspapers, magazines, journals, and more
Insurers Launch Proprietary No-Load VAs.(variable annuity)
Newspaper article from: Annuity Market News Lavine, Alan January 1, 2004 700+ words
...Conn., has launched a no-load variable annuity for wrap accounts. And Fidelity Investments...advisers. They allow advisers to manage variable annuity assets in separate accounts or wrap...benefit from fee-based management of variable annuity sub-accounts. Since the variable...
VAs Expected to Move to Unbundled, Simplified Fees.(variable annuity)
Newspaper article from: Annuity Market News Lavine, Alan March 1, 2005 700+ words
Variable annuity compensation is changing. Currently...trail, represent about half of all variable annuity sales. But in the wake of new state...rights of accumulation that allow variable annuity policyholders to qualify for sales...
Beware of VAs' Rusty Nails; Most variable annuity benefits involve a claw-back...
Magazine article from: Bank Investment Consultant May 1, 2009 700+ words
...sitting. And it's not as if variable annuity benefits are getting sweeter...the bear market, countless variable annuity contracts with living benefits...1 million into a typical variable annuity with a lifetime withdrawal...
VAs Aim to Hedge Against Interest Rate Risk.(Variable Annuity Research & Data...
Newspaper article from: Annuity Market News Lavine, Alan July 1, 2004 700+ words
...need to add to reserves to cover secondary variable annuity guarantees? Variable Annuity Research & Data Service (VARDS...Perrin, Atlanta, shows that even with a variable annuity weighted average portfolio mix of 70...
Ready to Roll? Using VAs for IRA Rollovers.(individual retirement...
Newspaper article from: Annuity Market News March 1, 2005 700+ words
...solutions to meet their retirement expectations, using a variable annuity for an individual retirement account (IRA) rollover can...prepare for a comfortable retirement with the use of a variable annuity IRA rollover. Since many clients use tax season as a time...
Variable Annuity Sales up 78% at Banks.
Newspaper article from: Annuity Market News October 1, 2003 700+ words
...market this year has been variable annuity sales, which have risen...plethora of bad press VAs have received this year...perfect environment for VAs. "People have seen...enjoyed an increase in our variable annuity sales." However...that's going into VAs is going into ...
Milliman Survey Confirms Continued Dominance of Guarantees in Variable Annuity...
Press release article from: PR Newswire December 20, 2006 700+ words
...survey of leading variable annuity (VA) carriers...continue to drive variable annuity sales. Total sales of VAs that offered a GLB...which tracks U.S. variable annuity sales.) GLBs provide guarantees on VAs that would otherwise...
Holding Steady: Variable annuity sales remained high for the traditionally weak...
News wire article from: The America's Intelligence Wire March 15, 2006 700+ words
...group (which excludes VAs where availability is...to 403(b) plans) variable annuity sales totaled $82...sales of non-group VAs with living benefits...dollars invested in VAs, including fixed accounts...of VARDS Products (Variable Annuity Research and Data Service...
Jackson National Introduces New Investor-Centric Features To Its Top-Ranked...
Press release article from: Business Wire October 4, 2004 700+ words
...new features to its variable annuity contracts. The most...lineup within its VAs. JNL has named Wellington...having to annuitize the variable annuity contract. By choosing...design of JNL's variable annuity products, including...
The Tax Smart Workhorse: The flat-fee variable annuity can accelerate wealth...
Magazine article from: On Wall Street Greenburg, Laurence September 1, 2008 700+ words
...platform, such as a variable annuity, with a flat...do traditional VAs with asset-based...that flat-fee VAs can also generate...does a traditional variable annuity, with asset...tax-deferred variable annuity than in a taxable...Clients Flat-fee VAs can be a ...
For more facts and information, see all results

Source: HighBeam Research, Weighing the variables: is a variable annuity for you? Depends on...

©2009 Gale, a part of Cengage Learning. All rights reserved.
About us | FAQs | Contact us | Privacy policy | Terms and conditions
Other Gale sites: Encyclopedia.com | HighBeam Research | Acquire Content | Books & Authors | Goliath | MovieRetriever | Smart QandA