What do we really know about Variable Annuities?

http://www.fpanet.org/journal/BetweentheIssues/LastMonth/Articles/WhatDoWeReallyKnowAboutVAIncomeRiders

Filed under: Variable Annuities - Bad For Your Wealth

Above is a great piece by Richard Gilman in the Journal of Financial Planning about the unknown risks that face variable annuity holders.

I've written about these policies fairly extensively, and in my own time working for a firm selling them I agree completely with all of the risks Gilman notes. We only need to look at the last downturn to see companies needing bailouts, raising fees, and eliminating your investment options in order to protect themselves (not protect your wealth).

In addition, individuals face the reality they will be hostage to the policy, which generally offers significantly reduced income versus other traditional strategies.

Buyer beware: Variable annuities are sold without enough disclosure about the extent of the risks buyers place their savings at.

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