More and more investors are considering a variable annuity as part of their retirement investment plan. Here we discuss the benefits, in life and death, of a variable annuity, as well as its costs. A variable annuity can be a smart investment; however, it’s not right for everyone. Learn whether or not it’s right for you.

The tax sheltering of the mutual fund is a benefit for more than tax-free growth. If you own mutual funds and attempt to rebalance as the markets fluctuate, at each rebalancing you have a reportable tax incident. As anyone that actively manages their mutual fund portfolio can attest, it becomes a nightmare to track all the changes in a rapidly moving market. The tax sheltering of the annuity eliminates all the record keeping involved in mutual funds.

Variable annuities aren't all alike, however. Each of them has different surrender periods, charges, funds and guarantees. The interior charges on a variable annuity affect the investment return. The easiest method of finding the best variable annuity is to compare the rate that you'd receive if you invested into the product. Many of the companies offer hypotheticals based on past experience. While they aren't predictions of future returns, they do give you an idea of the policies with the best performing funds and lowest costs.

Variable annuities have guarantees on many products. The guarantees, known as living and death benefits, are different for every policy type. Some of the living benefits offer the guarantee that you'll never lose a penny of principal as long as you leave your funds in a specified length of time. The length of time varies from policy to policy and the some policies actually guarantee more than just the principal but also a specified return on your funds

Death benefit guarantees are important also, particularly if the investments in the variable annuities are heavily loaded in the stock market during a volatile time. The principal may shift wildly as the market fluctuates, but the investor knows that his principal is safe and secure when he has a death benefit guarantee on the balance.

Variable annuities are wonderful retirement product but you need to know what you're buying before you dive in headfirst. It pays to decide what you need, compare annuities and seek the advice of a trained annuity specialist before you purchase any variable annuity

When it comes to saving for retirement, many people have different viewpoints, investment strategies, and needs. Variable annuities allow investors to save their money, tax deferred, while keeping a lot of investment freedom that they wouldn’t have with other types of annuities or retirement products. In this article we give an overview of variable annuities, and their benefits.