Do you already have a variable annuity inside an IRA or are you thinking about buying one? If your answer to either question is yes, you need to watch this video from Mullooly Asset Management because there are some important details you should know about annuities. By investing your savings in a variable annuity you are saddling yourself with limited investment options, high fees, and a usually long “surrender period”. In short, having a variable annuity inside an IRA is an expensive way to limit the way you can invest your money, and you’re locked into it for a fixed amount of time.
At least your investment will be tax deferred since it’s an annuity, right? Yes, that is true. However, having a traditional IRA account without an annuity would also be tax deferred. In most cases, avoiding variable annuities is probably a good idea.
If you have a variable annuity inside an IRA already, there is some good news if you’re over 59.5. Even if you’re still within the “surrender period” of your annuity, there’s a way to get out of it. So if you’ve realized the annuity you were sold (and they’re always sold, not bought) isn’t the great investment it was supposed to be, you can get out of it.
In the video, Tom also discusses a variable annuity related situation that came up with a client recently, why annuities and IRA’s don’t mix well, and the way to potentially get out of a variable annuity for those over 59.5.