A variable annuity allows you to choose from a selection of investments that are tax-deferred. The amount of money you receive then depends on the performance of the investments you chose. While this may sound like a good deal, read on to learn some reasons why it’s not your best choice.
Reasons Why Variable Annuities Are Not Good
Variable annuities are often pushed on to people by annuity companies because there is usually a huge sales commission for the insurance salespeople. As a result, they try to sell you on investing in a variable annuity for their own gains. The layouts of the policies are inflated way beyond any return you could receive even in the most perfect circumstances.
- There is a lot of risk in investing in a variable annuity because you don’t really benefit from a rise in the stock market. The annuity company gives you only a tiny portion of any gains that are made and they can cap the amount you receive.
- There are big expenses and fees you will need to pay and a large tax placed on them.
- If you want to cancel the contract, there is a huge surrender charge you will have to pay.
Variable Annuity versus Immediate Annuities
A big reason why variable annuities are not a good option is because you spend more money to receive the same amount of income as you would with an immediate annuity. For example, if you pay around $100,000 for your variable annuity, you could receive the same amount of income if you invested in a $60,000 immediate annuity.
If you need help with selling annuity payments for cash, trust in the experts at Cashout-Annuity. Give us a call at (844)340-6649, today.