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How to Shop for Variable Annuities

There are several options to buy variable annuities on your own, but understand the pros and cons before you do.

Vanguard's decision this summer to stop selling its low-fee variable annuity means one less option for investors who like to buy annuities directly, especially ones that are more complex than immediate annuities. You still have plenty of choices when shopping for a variable annuity, but carefully do your homework before locking up your money.

Also, decide what features are important to you. Options may include a rider for guaranteed income or to benefit heirs. If leaving a bigger legacy is a priority, it may be worth paying a little more to get a guaranteed death benefit, Hawley says. But watch out for costly options that are “sophisticated and richer” than what you are looking for, he says. The fewer bells and whistles an annuity has, the less it should cost.

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