Considering a variable annuity as an income guarantee in retirement? A variable annuity is a long-term investment and has many features that may appeal, such as a guaranteed income for life which insures you cannot outlive your assets. There is even a death benefit should you die before you start receiving payments. Generally a variable annuity is one you purchase with either a lump sum payment or several payments and the annuity increases or decreases in value depending upon your investment choices. Your contract with the insurance company specifies that they will make periodic payments to you beginning at an agreed upon time.

The tax laws surrounding variable annuities are complicated, and you may want to consult a tax adviser on whether a variable annuity is right for you.

The SEC has a website that provides an overview on variable annuities and how they work. For more information, visit the US Securities and Exchange Commission’s website on Variable Annuities.