A Variable Annuity May Not Be Suitable for Your Situation

Long term growth in the stock market, gains that are tax deferred until withdrawn, a death benefit that provides your beneficiaries with the balance of your account value or a guaranteed minimum payment: a variable annuity seems like a great investment tool on the surface. And it is, for a certain segment of the population, mainly those who have a longer investment time horizon and can stomach the ups and downs of the stock market. For most people, however, variable annuities are perhaps not the best investment choice for a number of reasons.

First of all, with a variable annuity, there is no guarantee that you money will always be there. The value of a variable annuity is dependent on what investment options you choose and the performance of those market based investments over time. If you choose poorly or if the overall market suffers losses, then you could end up with less money than you started with. This uncertainty makes a variable annuity a bad choice for those who are looking to gain in the short-term – your investment could take years to recover after a few bad months in the stock market. And high surrender fees can keep you locked in an underperforming variable annuity for seven years or even longer.

Variable annuities are often loaded with fees and expenses, such as administrative fees, fund expenses, mortality and expense risk charges and so on. These numerous fees can cut into the performance of your variable annuity and ultimately the value of your investment. In addition, the hefty commissions associated with variable annuity sales may result with you being subject to high pressure or unethical sales practices.

In contrast, fixed-indexed annuities offer all the benefits of a variable annuity, but with one additional feature: your principal and interest earnings credited to your account are 100% guaranteed and not subject to market risk. Your account will never lose value and will even earn a minimum interest rate when the market is in a downturn. A fixed-indexed annuity ties its interest earnings to a particular market index, such as the S&P 500, instead of investing money directly in the stock market, like a variable annuity.

Are you considering a variable annuity but are interested in learning more about fixed-indexed annuities as an alternative strategy for a portion of your retirement savings? Visit the Website FixedAnnuityDirect.com or call 1-877-519-8599 and speak to an Annuity Specialist today.