Variable Annuities

Investing A variable annuity is similar to a 401k in some respects because you can choose for yourself which investments you would like to make up your portfolio. The premium can be divided with portions being used to fun several subaccounts that are diversified according to risk. These separate investments may include an ultra conservative money market fund, bonds, mutual funds, and more risky areas such as international equities. When purchasing these products, you have the choice of either making a full premium payment upfront or investing into the fund by making your payments over a set period of time. You can typically expect the following features from a Generally, you are free to invest as much as you like tax free If you are interested in getting the maximum return on your investment, then it is re.mended that you choose a variable annuity as opposed to the fixed rate alternative. They have provided higher yields historically, with the catch being that there is greater risk over short and medium time periods. It is impossible predict just how well risky investments can perform, but judging from the past they can typically be expected to yield up to 12 percent over a period of 10 years or more. Although this is a very trusted and widely used investment, it is a good idea to be.e familiar with the disadvantages of these annuities as well. For example, if you make any withdrawals for in.e before you reach the age of 59.5 you will be charged a 10 percent tax penalty. In addition, they are not considered to be a capital gain so although the growth is deferred, you will still be taxed according to the regular in.e tax rates. There are also certain fees associated with these accounts such as management and annual contract fees to cover certain expenses. If you would like to find the variable annuity that will give you the highest yields, you will first have to be experienced in managing flexibility in your investments. The right financial advisor can help you to choose the investments that will make you the most money. About the Author: 相关的主题文章: