What is a Variable Annuity

A variable annuity is a contract that allows you to contribute money into the annuity either through a lump sum contribution or installments and you can have those monies invested in various mutual fund choices that you or an advisor determine suitable for you.   In addition, variable annuities allow you to invest your contribution in a money market fund (with corporate or government bonds in them) that have lower levels of risk but lower rates of return; fixed rate options also exist in most of these products as well. 

Both Variable and Fixed Annuities can be tax qualified or non-tax qualified.  Tax-qualified annuities can be used for IRA, 403B, 401K and other tax qualified plan rollovers.  Non tax-qualified annuities can compound tax deferred with after tax dollars. 

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Content is for informational purposes only and may not accurately reflect your specific situation. Information is not intended to provide legal, tax, or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances.