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Variable & Indexed Annuities

Found 35 Articles.
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What is a Variable Annuity and How Does it Work?

July 20, 2020

Variable annuities are a specific type of contract issued by an insurance company that requires the annuitant, or the annuity owner, to choose from a variety of investments to put the principal.   The funds put into the investment are called the principal, and the payouts received by the annuity owner are contingent upon the […]

Another Reason to be Wary of Variable Annuities

January 20, 2017

Investors have received many warnings about variable annuities over the years, including in Retirement Watch. There’s another recent example of why to approach these contracts with caution. The Hartford is exercising its right to change the investment offerings in its variable annuities. Instead of offering 60 funds, holders will have to choose from 11 funds. […]

Checklist: Variable Annuity Checklist

April 3, 2016

Should you consider making a Variable Annuity part of your portfolio? This checklist will help you decide. Be sure you have maximized contributions to IRAs, Roth IRAs, 401(k) plans, and other retirement plans. If your investment strategy is to buy and hold for a long time stocks or mutual funds, consider investing through a taxable […]

Kind Words About Variable Annuities

April 22, 2014

I’ve been among those critical of variable annuities over the years. Many of them have high fees and expenses, plus they convert tax-favored capital gains and dividends into ordinary income. But there’s something different about many variable annuities sold in recent years. After the stock market crash following 1999, insurers have to sell something more […]

Evaluating Indexed Annuities

May 23, 2013

They used to be called equity indexed annuities, as this article still calls them, before the sales people decided to change the generic name. I’ve written about these before in Retirement Watch, and this article is a good read. It might be a bit too negative. These annuities can be good for someone who would […]

Handling Changes in Variable Annuities

May 1, 2013

Tax planning is less of a guessing game these days with the tax law settled, at least until Congress decides to push some kind of tax reform. In the wake of the American Taxpayer Relief Act of 2012, we need to revise and rethink some strategies about Roth IRAs, especially about converting traditional IRAs to […]

Does Warren Buffett Like Variable Annuities?

February 13, 2013

Berkshire-Hathaway, Buffett’s investment vehicle, recently entered into a deal with the insurer Cigna to reinsure some variable annuity guarantees of Cigna. No doubt this will be viewed as Buffett entering the annuity, especially the variable annuity, market and be used as a sales tool for variable annuities. Don’t fall for that line. There are a […]

The Shrinkage in Variable Annuities

November 16, 2012

Hartford Financial wants to get out of the annuity business. It wants out of the variable annuity business so badly that recently it offered to buy out the interests of current variable annuity holders. This is part of a trend among insurers to limit or withdraw from their annuity businesses. The problem for insurers is […]

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