"Should I buy a variable annuity?"

We couldn’t begin to count how many times we’ve heard that question from listeners and viewers through the years. And you know what’s really amazing? Here’s another question we get almost as often:

"How can I get out of this variable annuity?"

Boy, does that say a lot!

Even state security administrators and federal regulators rank variable annuity sales as one of the most problematic, thanks in part to unscrupulous salespeople, but also due to the downright complexity and confusion inherent in an annuity contract.

We have not been fans of variable annuities for a number of reasons… among them the many kinds of fees charged…sometimes as much as 3% every year!

Sorry to report that nearly $1.5 TRILLION have been invested in variable annuities!

Well, don’t you worry. We’re going to sort it all out for you so you know exactly how these things work and don’t get stuck in a bad investment. If there were ever a money subject that needs some straight talk from someone looking out for your interest, it’s variable annuities!

Let’s start with the basic definition: A variable annuity is a contract between you and an insurance company under which the insurer agrees to make periodic payments to you beginning either immediately or at some future date. You purchase a variable annuity contract by making either a single purchase payment or a series of purchase payments.

A variable annuity offers a range of investment options. The value of your investment as a variable annuity owner will vary depending on the performance of the investment options you choose. The investment options for a variable annuity are typically mutual funds that invest in stocks, bonds, money market instruments or some combination of the three.

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