Regarding variable annuities for retirement income?

I have been told that the key advantages are "no loads or fees" (other than early surrender charges), ability to move money between fund "families" at no cost, ability to add and delete funds at will at no cost, and protection of invested amount to my spouse should I die. Are there any downsides?

I appreciate the responses but perhaps I did not properly represent my position in this. I am making the choice to use a financial advisor who has demonstrated good results with other clients. He uses variable annuity contracts for IRA type money (401k and pension lump sum) as a container to easily manage diversification (spreading the money over several funds and fund families while providing the ability to easily rebalance between them on a periodic basis. I know this can be done outside of a variable annuity but requires more time and effort that I am not willing to spend. The advisor needs to get paid for his work, so I know there are fees but I am focued on results, and there is a proven track record. The other thing I left out is that I need to exercise rule 72t. Recommendations?

plenty....there are fees associated with annuities. Do not let them tell you otherwise. The prior poster has it 100% correct! Give him 1000 stars and best answer and then avoid the annuity salesman like the plague!

Invest at Vanguard, Fidelity, T Rowe, or any other of the big guys instead of the annuity product. You'll have similar protections without the huge expenses that go with annuities.

---

My answer still hasn't changed. Your financial advisor can do all those things using a Schwab account or an IRA product with a open source architecture system. You are already paying him to manage your money, why should you pay the insurance company those fees as well. And 72t distributions are not that hard to calculate. In fact there are numerous calculators online. You simply have to make the calculation based upon life expectancies once and then make the distributions at least annually after that. Why make it more difficult and costly then you have to.

Annuities are viable products only for those that can't sleep at night unless they know exactly how much they are earning and how much they are going to get paid. Certainly they have their place but they are simply not worth the money to the educated investor.

Lies, Lies, Lies, all lies!

Annuities are one of the most expensive and worst performing investments out there and anyone who said there were no fees is full of it. There may not be fees that you *see* but there are fees, trust me!

Annuities are only appropriate for about 10% of people over 65. Everyone else should steer clear. If you're really set on an annuity, call Vanguard and talk to them. They will tell you if it is appropriate for your situation or not and they don't have any obnoxious hidden fees that they'll stick you with.

Whoever told you this is more interested in how much money they are going to make and not about how much you will lose. Run far away!

Good luck!

http://www.personalfinance101.org/?utm_s...

Apparently the two answers you've gotten really don't understand that there are several kinds of Annuities!

The one you are talking about is the most risky, and as the market fluctuated over the last 6 years, people lost their shirts!

The type of Annuity you need to consider is a FIXED Annuity! They are safe, no fees to you unless you cash out the entire Annuity before the first year was up. They can't be all that bad since providing a monthly income and safe interest for you entire life is exactly what most companies do when you retire HOW? A fixed annuity! Same with the Lottery with monthly payouts.

I can tell you that Financial planners will make more moving your money around than any insurance agent will on an annuity.

The do avoid probate, and the interest in tax deferred. Pretty competetive interest rates too. The only downside to the fixed is that if you wish to cash out the account there are penalties. If you wish to get a monthly income, none. No maintenance fees, or management fees. Go directly through an insurance co., not a broker or planner. Save yourself thousands and manage your own money! Hope that gives you a more accurate side of the different types of annuities you can look into.