What are good points and bad points to a variable annuity?
Wednesday, September 8th, 2010 at
10:24 pm
A financial advisor what me to take a tax differed account I have and roll it over into a variable annuity account. Is this good or bad.
Does it matter that a get a lease an 8% return on my money?
Filed under: Retirement Planning
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The bad points are the high fees and taxes when you take it out. And no stepped up tax basis for heirs. I dont know any good points.
If you are 70 years old, it might be a good idea. If you aren’t, get a new "financial advisor", as this one is trying to rip you off. While annuities are useful & appropriate in SOME limited situations (for example where you have a lump sum of $200,000, you are 70 years old, and you want an income stream until you die…), the thing they are best for is earning HUGE commissions for the agent selling them…
Variable annuities are great for the financial advisor. The fees are higher on this product (for him or her) than anything else they sell.
There are many that are tring to make the use of a variable annuity for an existing tax differed account (like IRA’s, 401K’s, 403B’s, etc) illegal. Since it’s not illegal yet…. it’s highly immoral.
Taking tax exempt or differed funds & putting them into a product that you have to pay high fees… because it’s tax differed is….. paying for something you’re already getting for free.
Dump this clown!