Are Variable Annuities Safe?
Are variable annuities safe? Variable annuities guarantee you will receive no lees than your investment. There ARE other considerations.
Some of the selling points for variable annuities include:
Some variable annuities guarantee minimum payout of the initial investment capital, regardless of market fluctuations.
Variable annuities provide some protection even when insurers suffer losses.
Variable annuities will provide a guaranteed income for the rest of your life and provide an inheritance for your heirs.
Safety Nets -
To minimize risk while taking advantage of higher payout possibilities, many investors have recently invested in variable annuities with guaranteed minimum withdrawal benefits. With these variable annuities, you have the guarantee that your payout will never be less than your initial investment. For instance, if you had a 5% income withdrawal option and you were to invest $300K in your variable annuity, the minimum amount you are guaranteed to receive is $15,000 per year regardless of what happens to the stock market.
Another aspect to lend peace of mind to the investor is the regulation of annuities by the Securities and Exchange Commission and the Financial Industry Regulatory Authority which oversee investment firms to insure investor safety. These entities make sure your investment is protected for creditors in the event of company insolvency. Insuring that the answer to the question “Are Variable Annuities Safe?” is a resounding “Yes”.
Despite the many safeguards in existence to protect investors, to ensure the safety of your investment, it is important that you take an active role in your savings plan. It is vital that you periodically review your annuities to ensure that they still meet your needs. While the insuring entity will most likely stay solvent during times of economic hardship, it is up to you to take an interest in your retirement investments.
For the future -
Are Variable Annuities Safe? Not only are they safe to trust your retirement to, they can provide for your beneficiaries after your are gone. The death benefit states that should you die prior to retirement, your family will receive the payout.
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