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

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 ...