Vanguard Variable Annuity: Low-Cost, Flexible Investment

2007-05-02 10:04:19

( Insurance )



Due to the popularity with investors, variable annuity sales have increased in recent years. Unfortunately, variable annuities have been sold at higher prices because of fees that you have to pay for special insurance features and sales commissions. To make these products more affordable to ordinary investors, Vanguard variable annuity has been offered directly to the public.

Vanguard variable annuity combines the substantial tax deferral features of a traditional individual retirement account (IRA) and the investment benefits of mutual funds. When you invest in Vanguard variable annuity, your money is pooled with that of the other investors. Vanguard portfolio managers invest this pool of money to one or more types of investments that include money market, high yield bonds, total bond market index, equity income and the like. You, as an investor, decide which of the available portfolio you want to invest your money and how much money you want put in.

Vanguard variable annuity is fit for the investment needs of long-term investors whose IRA or qualified retirement plan contributions have already reached maximum, and also those in upper income brackets who want investment options with deferred tax features on the earnings from their investments. Upon withdrawal of your Vanguard variable annuity, the ordinary income tax rates shall be imposed upon it. In the meantime that you do not withdraw your Vanguard variable annuity funds, these funds grow without tax imposition upon them.

Vanguard variable annuity allows you to choose at the time of distribution if you want to get a fixed income stream for life. The annuity carries a death benefit that assures your beneficiary the face value or the higher amount invested net of taxes and withdrawals. If you want to do a 1035 transfer into the Vanguard variable annuity plan from other annuity plans, you may do so without incurring any cost or tax consequence.


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