From FINRA’s website, http://www.finra.org “Investing in a variable annuity within a tax-deferred account, such as an individual retirement account (IRA) may not be a good idea. Since IRAs are already tax-advantaged, a variable annuity will provide no additional tax savings. It will, however, increase the expense of the IRA, while generating fees and commissions for the broker or salesperson.”iii
Variable Annuity Riders GMIB – Guaranteed Minimum Income Benefit rider can be added to some variable annuities. What this provides is income at some point in the future. This usually requires annuitization, which means you lose control of your money. NOTE: This does not offer protection or guarantee of the principal.
GMWB – Guaranteed Minimum Withdrawal Benefit rider can be added to some variable annuities. This appears to be a more flexible cousin of the GMIB. The distinction here is that you get to withdraw money without annuitization – thus possibly maintaining more control. NOTE: This does not offer protection or guarantee of the principal. Fixed Index Annuity or Hybrid Annuity Would you like an annuity that tracks the performance of the stock market, yet helps to protect your principal when the market declines? The fixed-indexed annuity could help you to cover these objectives. The hybrid annuity can offer some market risk protection, tax deferral, a minimum interest rate guarantee, probate avoidance, and guaranteed minimum income payments for life. The interest earnings for these annuities are based upon the growth in an accepted equity index, such as the S&P 500 Index, Dow Jones Industrial Average, and Russell 2000 as well as a