No. of Recommendations: 0
The advisor there told me they don't allow people to put Variable Annuities inside IRAs. That's because it's not financially smart, as you are essentially putting a tax-deferred vehicle inside a tax-deferred vehicle. Doesn't make sense.

I've only seen one case where a variable annuity inside an IRA made at least a bit of sense. If you put ENOUGH MONEY into this particular annuity, there was no surrender fee and annual fees were capped at about 1.5%. Money inside the annuity could be moved between the various funds that were available without additional charges and without restrictions on the number or size or frequency of exchanges. In effect, this annuity made it possible to implement various fund timing schemes with a cap on the trading costs. If you believed there were excess returns to be earned by trading in and out of a fund more quickly than otherwise possible, the fee charged by the annuity might be reasonable. The insurance company also did vetting on the available funds to verify that they were honoring their stated strategy and keeping the fund fees low.

There are probably more effective ways to implement the same schemes today.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.