More About Variable Annuity: The complexity and variety of variable annuities available means that there are no clear-cut answers about who should use them. But keep these two very important things mind: First, they typically carry high costs, usually much higher than simply owning the same investments directly. Second, while they offer tax-deferral, you can get this from investing in your 401(k) or IRA. This generally makes people who have maxed out their contributions to these accounts but who want to invest still more on a tax-deferred basis to be the best candidates for variable annuities.

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