Whether you're looking for another retirement savings product or want to switch out of an existing variable annuity, consider the Vanguard Variable Annuity.
The main appeal of the Vanguard Variable Annuity is its low costs. According to Morningstar, this annuity's average annual cost is about 75% less than than the industry average of other variable annuities. With an average expense ratio of 0.62%, this variable annuity will help keep fees from eating into your investment.
Did you buy some annuity product earlier this decade that allowed some provision for long term care insurance too? If you did, and weren’t really sure of the benefit, next year might be the year that you do. In 2010, you will be allow to withdraw money from a certain kind of annuity without paying taxes as long as you use it to pay for qualified long-term care coverage. All baby boomers, especially those in the highest tax bracket, can thank the Pension Protection Act of 2006 for this new, fortunate development.
Whether you are considering fixed annuities or variable annuities, there are four main steps you should follow and evaluate when setting up an annuity.
A recent article by Dan Solin at DailyFinance explains his views on variable annuities, equity indexed annuities, and fixed immediate annuities which are also known as fixed income annuities. He left many important details out, so I'm going to break his column down and add my own commentary.
Deferred Variable Annuities
With deferred variable annuities, you pay the insurance company a lump sum...[or you can make a series of smaller contributions.] Your money is invested based upon your selection of the investment options provided by the insurance company. The invested funds grow tax-deferred until you start taking distributions. You cannot access your funds without a tax penalty before the age of 59½ ...[which applies to all annuities].
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