Subscribe to Entrepreneur for $5

Putting Your Money in Variable Annuities

Is a variable annuity for you? Depends on who's pitching it.

This story appears in the March 2003 issue of Entrepreneur. Subscribe »

companies and the brokers who love them just can't get enough of variable annuities. In the days when stocks were hot, VAs were pitched as the ideal way to capture the upside of equities while deferring taxes. Now that has become a dirty word, VAs are instead being sold as a no-lose proposition in which you're protected when stocks fall.

Both descriptions are accurate, though incomplete. They conveniently fail to emphasize the disadvantages embedded in the hybrid - product. Chief among them are high fees, punishing withdrawal penalties, gimmicky--and pricey--options and enough complexity to stump your accountant.

Continue reading this article - and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5.

Entrepreneur Editors' Picks