These New Variable Annuities

**sweeps** · 12-12-2007, 11:03 AM

You've already been duped once... why are you considering buying another variable annuity? Variable annuities exist for the benefit of the seller, not the buyer.

**jIM_Ohio** · 12-12-2007, 11:29 AM

Originally posted by trainguy View Post

Hello,
I have no excuse for myself, but in 2000 I purchased a variable annuity,
saw it plunge and now see it having earned just under 3% yearly. Yes,
I did this.
As you'd expect, I am getting subtle suggestions (pressure) to roll the
funds into one of the 'new & improved' variable annuities. Gee, it's
guaranteed income and they'll add 5% to the year-end balance for
the 1st 10 years. For a cost, of course.
I am just out of the surrender fee period and am 59.5. I am ready to
move this amount into something else. Does anyone see a variable
annuity (and its fees) to be better than other options ?. I know that
each situation is somewhat different, I'd just like to see if these
vehicles have worked for others ?
Thank you.

Your age factors into this.

As does the amount in the VA.

As does you need for the income from the VA once you annuitize.

When do you plan to retire?
What is the benefit if you annuitize now?
What is the expected benefit if you annuitze at a later date?

What are penalities if you annuitize a new VA later (can you annuitize if you have not passes surrender period on a newly purchased VA?).

How is the sub account of the VA invested?

Do you have other retirement assets? How much? When do you plan to retire?

**sweeps** · 12-12-2007, 12:10 PM

A fixed annuity may be appropriate for someone in retirement.

A variable annuity is rarely appropriate for anyone. They are high in fees and complexity, and low in returns. If someone needs growth, then they should put a percentage of their assets in low-cost stock funds.

**Tree0164** · 12-13-2007, 02:04 AM

If you are 59.5 and pass the surrender charge period you can take it out wihtout any prepayment fees.

If you cash to it in.. you will pay ordinary income taxes on the earnings. I would put it in mutual funds depending upon your strategy.

I would stay out of annuities they are very restrictive unless you have large amount of earnings.

**Bryan Anderson** · 03-24-2009, 05:25 PM

If your goal is max income, these variable annuities don't stack up well against fixed immediate annuities.

They guarantee to pay you 5% of the value. Immediate annuities will pay 7-8% for someone age 60. The company pays you a lower rate and your account continues to fluctuate. They take the investment risk and your return suffers as a result.

This is a complicated product that deserves an in-depth explanation of how it works.

I posted the answer and will gladly show my work if requested.

These New Variable Annuities