Best Variable Annuities

For those who are not familiar with investments, finding the best variable annuities can seem like quite a task. Even those who have invested in the past may be taken aback by the varying plans and options that are available with these types of accounts. However, there are ways one can prepare for their final decision and ensure that decision is one that will return the best earnings at the lowest risk.

Since there is no guarantee that investors will not suffer a loss as there is with fixed annuities, it is important to be sure that the option chosen is one that gives the investor the greatest power and flexibility. Plans that offer only a handful of investment options are examples of plans that one will wish to avoid. The old saying about not putting all of one’s eggs in one basket comes to mind, and is supreme wisdom for anyone investing, whether it be in a variable annuity or anywhere.

There should be plenty of diversification in the best variable annuities. This means that the investor has a wealth of options from which they can choose. They may prefer a conservative approach, only investing a small portion of their principal in many different securities, or they may take a more aggressive approach. The point is that they should have the freedom to do this or the plan is a poor one.

Variable Annuity Fees

The best variable annuities will come with the lowest priced fees. Since there seems to be a fee for virtually everything related to this type of annuity, finding a plan that offers minimum fees will be the key to ensuring the investment grows rather than simply pays for itself. Although the investor themselves do have a great deal of freedom in how their money is invested, there will still be involvement from the financial company from which the annuity was purchased, and most will charge an annual management fee for handling the account.

Of course, the lower the management fee, the better the plan, but there is no reason why any investor should pay more than 2 percent annually for this. There are simply too many good plans available for 1 to 2 percent that paying more than this is, quite frankly, financially irresponsible.

One must also consider the size of the annual penalty free withdrawal allowance. Most good plans will allow for an 8 percent withdrawal without penalty, however the best variable annuities will allow for 10 percent penalty free. Some plans will only allow penalty free withdrawals on the earnings themselves, so it is important to know for sure whether or not the principal investment can be accessed without penalty if needed.

Finally, the best variable annuities allow for a lifetime monthly payment. This is only an option on deferred annuities, since immediate annuities expire after a set period. Finding a plan with this option and utilizing it will allow for the greatest growth potential and a secured income for the remainder of the investors life.