The Hidden Costs of Variable Annuities and How to Avoid Them

When people seeking guaranteed income turn to annuities, they are gaining security … but they need to realize what it's costing them. Surrender charges, fees and earnings caps all come into play.

(Image credit: DNY59)

Annuity sales are escalating, with people looking to roll over retirement savings accounts or other assets into an ongoing income stream. Variable annuities appeal to people because they offer mutual fund investment choices, locked-in gains (or protection from bad market years) and death benefits.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up
Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Tyler Harrison, Fiduciary Adviser, AIFA
Founder, Efficient Plan, LLC

Tyler Harrison is an Accredited Investment Fiduciary Analyst (AIFA®) who has been working in the banking and finance field since 2005. Through his work as an independent Investment adviser, Tyler noticed an industrywide need for honest, transparent and conflict-free service within the niche of corporate retirement plans. Aspiring to be the change, Tyler founded Efficient Plan in 2013, an investment advisory firm focused on corporate 401(k) plans and fiduciary services.