Variable annuities- What are variable annuities, and why might people buy or avoid them?

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As you might have guessed, variable annuities are variable — the payments they issue fluctuate in relation to how the overall market or some other economic measure is performing. A variable annuity will typically feature an “accumulation phase,” during which you’re making payments to the insurer that are invested and, ideally, grow in value, followed by a “payout phase,” during which the insurer sends payments to you. You generally get to decide how the money in your account is invested, and it’s often put into stock and/or bond mutual funds.

Variable annuities can give you more control than fixed annuities, letting you choose how the money in your account is invested — conservatively or aggressively or somewhere in between. That’s great if your choices lead to large payments, but the stock market doesn’t always behave as we think or hope it will, and you may end up receiving less than you want or need.

Many variable annuities feature a “death benefit,” which involves your designating a beneficiary who will receive some kind of payment if you die before you’ve received all or a certain portion of the payments you were due from the annuity.

Please let me know if you have any questions. I’m here to help! To your incredible FINANCIAL success! “RETIRE BEFORE YOU EXPIRE”

– SHATEKA Husser

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