Annuities That Won't Cause You Pain

Lower fees and better guarantees help meet investing needs

Variable annuities are the stealth investment: Many own them, but few will admit to it. The insurance industry's answer to mutual funds, variable annuities get little respect. They largely deserve that fate. True, annuities allow you to delay taxes on your earnings. But in turn, you pay higher expenses, tie up your money longer, and complicate your retirement and estate planning. Worse, half of all annuities are sold to confused 401(k) and individual retirement account savers, who end up paying extra for a tax-deferred investment in an account that already postpones taxes.

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