Wendy-Swanson-20-2-What are the drawbacks of variable annuities
In this video, Wendy Swanson explains that while variable annuities can benefit from market gains, they also carry market risk and potentially high fees, making them less suitable for retirees seeking stability but potentially appropriate for younger investors comfortable with volatility.
Video Transcript
The other cons, again, this is very situational, but with a variable annuity, you know, for some people and particularly those that are retiring, you know, they may be wanting to getting away from the volatility that's in the market and this does react to the market. So, you know, the good part is that it goes up with the market, but the bad part is that it also goes down with the market and so you know for some of our older clients that may not be the best annuity purchase younger clients you know that's a totally different story.
Also you have to be very careful within the variable annuities because there are fees that are assessed on those variable annuities and you know some of them are very priced very well and others you know it can be pretty high the fees there and that becomes a hurdle for you because you know if you think about the fact that you're paying three to four percent in fees they're going to take that no matter what so now you have to have a return that exceeds that to get positive interest crediting. So those can be a little bit challenging and particularly in down markets, they can definitely be, a challenge to you.
