Variable Annuities (VAs) have been very popular for about a decade now, ever since the tech bubble burst. Unfortunately, their popularity may be due to brokers’ commissions of 4 to 8%, and the fact that the benefits are not clearly understood by clients or many of those that sell them. I think their biggest draw is that they have some guarantees, and believe me, sellers tout those guarantees. Unfortunately, those guarantees are not quite what people think they are.
Annuities may seem complicated, especially if you read their prospectuses, but the basic structure is simple. An insurance component provides a …Read More