What are pros & cons of including a Variable Annuity in a retirement plan?
What are pros & cons of including a Variable Annuity in a retirement plan? You need to really watch the fees on annuities. One good place to start is the Quicken web site that has a section on annuities:http://www.quicken.com/annuities/You can also try the Annutities section at SmartMoney:"What's Wrong With Variable Annuties?"http://www.smartmoney.com/ac/retirement/investing/index.cfm?story=wrongannuitiesand"Who Should Buy Variable Annuities."http://www.smartmoney.com/ac/retirement/investing/index.cfm?story=buyannuitiesFor a slightly more positive view of annuities you can try the National Association For Variable Annuities:http://www.navanet.org/and AnnuityNet.com:http://www.annuitynet.com/default.aspHope these help.Tyalor
Variable Annuity Pros and Cons:Pros:Tax deferred growthUnlimited annual contribution amountsAutomatic Account rebalancing/Asset AllocationGuaranteed death benefit to beneficiaryCons:High internal insurance costsWithdrawals are taxed as ordinary income not capital gainsNo step up in basis to heirs at death of ownerLimited investment choicesSurrender charges are high a many policiesThese are just the basics.Alan McKnight, CFP
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