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Special Report on

Investing in a Variable Annuity

investing in a variable annuity special research report Photo by
Variable annuities are among the fastest growing retirement investments. Despite their popularity, many people still don’t know much about them. It’s a contract issued by an insurance company that includes an option to turn your assets into an income you can’t outlive. * * Backed by the claims-paying ability of the issuing insurance company. Because taxes aren’t due on variable annuity earnings until they are withdrawn. Of course, when your earnings are withdrawn, they are taxed – in this case, as ordinary income. Because variable annuities are designed to be retirement investments, there is ...
is a financial contract in the form of an insurance product according to which a seller (issuer) — typically a financial institution such as a life insurance company — makes a series of future payments to a buyer (annuitant) in exchange for the immediate payment of a lump sum ( single-payment annuity ) or a series of regular payments ( regular-payment annuity ), prior to the onset of the annuity. The payment stream from the issuer to the annuitant has an unknown duration based principally upon the date of death of the annuitant. At this point the contract will terminate and the remainder of the fund accumulated forfeited unless ...
Why Consider Variable Annuities?
In conjunction with Sage Mark Consulting, a division of Lincoln Financial Advisors, a registered investment advisor. Mr. Chazin is a regular contributor to Connect Planner You can already participate in an employer sponsored retirement plan and / or contribute to an individual retirement account (IRA). If so, congratulations! You're one step for many Americans when it comes to saving money. But chances are you will have a supplementary pension savings need to make your financial future and secure your retirement goals. Here are some reasons to consider investing in a variable annuity: Need to get started. A variable annuity market research, surveys and trends
Variable Annuities Are Problematic as Part of Retirement Plans
Recently, many companies have begun to offer variable annuities as subaccounts in their company retirement plans. Variable annuities are contracts between a purchaser and an insurance company. According to a July 2, 2010 article by Mel Lindauer on, this inclusion is problematic for two main reasons. First, many of the variable annuities placed inside retirement accounts are high-cost non-qualified variable annuities carrying substantial fees including surrender costs. Second, if the retirement account is already tax-deferred (as is the case with most), a variable annuity will not provide the investor with any ... market research, surveys and trends


Variable annuities, depending on terms, can offer protection ...
How does the variable annuity protect me from lawsuits?: Depending on where you live, different assets are protected. The only asset that has federal protection from lawsuits is your qualified plan. Your pension, 401(k), profit-sharing plan, or money-purchase plan is protected from lawsuits as long as you have complied with all of the guidelines and formalities the government has set forth under the Employee Retirement and Income Security Act (ERISA). In Texas and Florida, the home is protected from lawsuits. In most other states, $0 to $50,000 of equity in the home may be protected. Since many people have more than $50,000 of ... industry trends, business articles and survey research
Variable annuities put pinch on some retirement plans
After putting two children through college, Tim and Kay Plumlee still expected a comfortable retirement with help from $126,000 in Tim's profit-sharing plan at work. But when a broker told them they could boost that sum with a guaranteed 6 percent annual return by investing in a variable annuity, the Plumlees, of Ulysses, Kan., jumped at what seemed a profitable, risk-free investment. Two years later, their retirement nest egg has dwindled to $60,000. The couple, who are in their 60s, have put on hold their dreams of fixing up their house and taking a cruise. "That was our savings," Kay Plumlee said. industry trends, business articles and survey research
Variable Annuities Don't Belong In Retirement Plans
we discussed some of the bad features of high-cost deferred variable annuities purchased with after-tax dollars (non-qualified annuities) and a few of the possible situations where a low-cost non-qualified variable annuity might make sense. In this column we'll discuss using variable annuities inside retirement plans (qualified deferred variable annuities). One of the major differences between non-qualified variable annuities and qualified variable annuities is that the investor who purchases a non-qualified annuity has the option to choose to buy or not buy. However, in many cases investors who have retirement plans, such ... market trends, news research and surveys resources
Cooper fiddles while fees burn
Just because Australia's superannuation stash provided the cash to rescue the banks from the global financial crisis, don't expect the same for you. There's only so far $1.1 trillion will go, you know. The review headed by Jeremy Cooper looked into every nook and cranny and could only come up with an average saving in fees of about half a per cent a year. Sure, that compounds but, even so, I can't imagine another $40,000 after working 37 years will get the punters too excited. Especially when it's a projection, not a promise. You'd get nearly half that just by going on the pension - in the first ... market trends, news research and surveys resources


fully taken advantage of before investing in a variable annuity contract. Variable annuities are not insured by the FDIC, are not obligations of any bank ... technology research, surveys study and trend statistics
Investor Tips: Variable Annuities
Variable annuities have become a part of the retirement and investment plans of many Americans. Before you buy a variable annuity, you should know some of the basics – and be prepared to ask your insurance agent, broker, financial planner, or other financial professional lots of questions about whether a variable annuity is right for you. This is a general description of variable annuities – what they are, how they work, and the charges you will pay. Before buying any variable annuity, however, you should find out about the particular annuity you are considering. Request a prospectus from the insurance company or from ... technology research, surveys study and trend statistics
The Variable Annuity: Probably Not a Good Investment
Extra costs combined with the different tax rates applied to capital gains versus ordinary income make variable annuities a poor choice for many. This article describes how to calculate the pros and cons of a variable annuity under several alternative scenarios. Refresher on Annuities The Trap Assumptions Case 1: Marginal Tax Bracket of 31% Case 2: 36% Tax Bracket Case 3: Assume Cut in Capital Gains Tax Moral of the Story Back to free advice page | Back to McQuarrie home page Congratulations! You are a thrifty person who believes in saving. Better yet, you make enough money that you can save with a vengeance. Naturally, ...
Life & Health Insurance: Variable Annuity, state insurance ...
A.M. Best and Co. has been rating insurance companies since 1899.  Their website is at Another rating service is Weiss & Co, who use a more stringent method of rating insurers. It's hard to evaluate a company based on a single letter grade. However, most insurance companies are very solvent entities, compared with other types of businesses.  You also have protection via your state's guaranty fund if the company goes bust at any time. This does not however, guarantee you won't lose money via the investments within the annuity. There are lots of questions you need to answer before investing ...
Investing in a variable annuity within a tax-deferred account, such as an individual retirement account (IRA) may not be a good idea. Since IRAs are already tax-advantaged, a variable annuity will provide no additional tax savings. It will, however, increase the expense of the IRA, while generating fees and commissions for the broker or salesperson. Also, if the annuity is within a traditional (rather than a Roth) IRA, the government requires that you start withdrawing income no later than the April 1 that follows your 70½ birthday, regardless of any surrender charges the annuity might impose. Learn more at @ ...