Annuities:  The Shocking Truths Revealed

Discover the Shocking Secrets About Annuities that Banks
and Insurance Companies Don't Want You to Know.

-- By Tony Bahu
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Planning Retirement with Variable Annuities

Annuities are insurance products that aid in retirement planning. Since last few years the concept of variable annuity has emerged as a popular option for people who emphasize on financial flexibility in planning their future. The variable annuity is one hand up against traditional life insurance and investment lines. It offers tax deferred investment division and insurance benefit. It gives you the option to choose among different separate account investment divisions according to your requirements. In addition to it you also enjoy the added benefit of transferring the money among these divisions without tax consequences. The variable annuity can accommodate both large payments of money and smaller systematic contributions. It is advisable to search around before choosing the insurance company that offers variable annuity. You should check out on the credentials of the company in terms of its track record and ratings from the recognized agencies like Standard &Poor and Moody’s. Individual risk tolerance is another influencing factor that determines choice of investment division. Please remember that in market both conservative and aggressive variable divisions are available hence choice should be made after thorough analysis of all the pros and cons factors as variable annuities are meant for long term use. Many people opt for ‘life cycle’ investment option where investors invest a high percent of their assets in risk oriented accounts and transition to fixed accounts as they near investment. The other option is where investors allocate assets based on ‘investment environment’. Dollar cost averaging enables investors to take advantage of market fluctuations. But it does not assure protection against loss in declining markets. Therefore, investors should be in a position to continue purchases through periods of low price levels. The variable annuity is an affordable and a flexible way to save money for retirement. However, variable annuity draws flak from industry experts like Tony Bahu who opines that besides being a costly preposition it lacks safety. He points out that the rise or fall of variable annuities are directly proportional to the high and lows of the stock market. Hence, one should think twice before planning retirement with variable annuities.

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