Variable annuities are a contract between you and your insurer. This type of investment account may grow tax-deferred. It can also include certain insurance features, such as the possibility of converting your account into regular monthly payments. Variable annuities can be purchased with either one or multiple purchase payments.
Variable annuities typically have two phases. The first phase is called the “distribution stage”. This is where the insurance company promises to pay a minimum amount based on your investment returns (positive or negative) and the principle.
What happens if you have to withdraw substantial amounts or terminate your contract? It can be more expensive. Variable annuities usually include a surrender fee. A surrender fee is added to your annuity contract after you sign up.
Variable annuities work best for those who are willing to take more risk in order to get a higher return. Variable annuities offer the highest potential to earn, despite the possibility of swings.
Variable annuities don’t work the same as fixed annuities. They don’t guarantee a return of principal invested. Some investors may take advantage of this opportunity to earn higher potential returns.
Each variable annuity is unique. Many annuities have unique features that make them stand out from other investment products and insurance policies. Variable annuities are more expensive.
RetireSharp Wealth Management, LLC is a registered investment adviser in the state of Florida. The adviser may transact business in states where it is appropriately registered, or where it is excluded or exempted from registration. Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any securities or investment advisory services. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser or a tax professional before implementing any strategy discussed herein.
This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Ifasi Financial and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by RetireSharp Wealth Management, LLC.