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admin Understanding Variable Annuities
A Comprehensive Guide to Investment and Retirement Planning
What is a Variable Annuity?
A variable annuity is a tax-deferred retirement investment vehicle that allows you to choose from a selection of investments, and then pays you a level of income in retirement that is determined by the performance of the investments you choose.
Key Features
- Tax-deferred growth potential
- Professional money management
- Death benefit protection
- Guaranteed lifetime income options
- Investment flexibility
Investment Calculator
Investment Comparison
| Feature | Variable Annuity | Mutual Funds | Fixed Annuity |
|---|---|---|---|
| Tax Treatment | Tax-deferred growth | Taxable annually | Tax-deferred growth |
| Investment Control | High | High | None |
| Guaranteed Income | Optional | No | Yes |
| Death Benefit | Yes | No | Yes |
Historical Performance Analysis
Frequently Asked Questions
Variable annuities offer several key benefits:
- Tax-deferred growth on investments
- Guaranteed death benefits for beneficiaries
- Option for lifetime income payments
- Professional investment management
- Ability to transfer among investment options tax-free
Variable annuities typically include:
- Mortality and expense risk charges (1.25% average annually)
- Administrative fees (0.15% average annually)
- Investment management fees (0.5-2% annually)
- Optional rider fees (0.25-1.75% annually)
- Surrender charges (if applicable)