Are you looking for flexible investment choices, tax-deferred growth, and principal protection guarantees? Variable annuities are sophisticated, long-term retirement vehicles which bring together these features through stock, bond, and money market investment portfolios wrapped in an insurance product package.
If you have maxed out on your 401(k) and traditional or Roth IRA contributions and have a long-term investment horizon, a variable annuity may be appropriate. Although contributions are made with after-tax dollars, earnings grow tax-deferred until withdrawn.
Policies increasingly feature living benefits that guarantee minimum income or minimum withdrawal. A guaranteed minimum account value assures investors that they won’t lose money over a certain period. Death benefits guarantee that, upon death, your heirs will receive at least as much as you put into the contract, minus any withdrawals. Many contracts have options that allow you to lock in investment gains, allowing beneficiaries to receive more than your principal.
With a variable annuity, you have the opportunity to receive lifetime income through the annuitization feature, in which the accumulated value of the annuity is converted into a stream of income. You can cover one or more lifetimes, and buyouts can be guaranteed for certain time periods as well.
Variable annuities are offered only by prospectus, which contains complete information about the risks, fees, and charges involved. Before investing, you should read the prospectus carefully and be aware of the risks associated with a variable annuity, including the potential loss of principal invested. Be sure you understand all the associated charges before you invest, including surrender charges, underlying investment expenses and fees for special features, such as a stepped up death benefit.and call your financial advisor to see if a variable annuity is right for you. IBI
