Author Box
Articles Categories
All Categories
Articles Resources

Annuity Vs Mutual Fund - Which Is Better?

March 02, 2012 | Comments: 0 | Views: 100

Annuity Vs Mutual Fund Comparison

In a fight of annuity vs mutual fund, which is better for a retirement investment? When it comes to starting an investment for your retirement, gains and losses aren't so much the point compared to the kind of moves that you make. Many people will tell you that an annuity is the better option, as mutual funds are much more complicated. However, more often than not, these people will get trying to get you to purchase an annuity from them. The truth of the matter is that when it comes to annuity vs mutual fund, the fund is actually the better choice.

The Truth About Variable Annuities

In the argument of annuity vs mutual fund, a common myth is that all of the money you put into your annuity will benefit you. This is simply not true. While you will be told that you are paying no commission up front, it will be compiled over time through the fees that you will be charged with. If you closely examine the fine print of your contract, you will notice several fees that will start to eat away at your profits. While mutual funds come with fees of their own, there are options available to you that leave you able to enjoy much lower fees. With a tax-advantaged index fund, more of your money will end up actually in your account than in your trusted company's hands.

The One Advantage Of Annuities

Withdrawing money from a mutual fund includes a tax, but as before, it is a lower rate. An increased flexibility in withdrawals will allow you to take money out of your account before the typical age of 59 and a half. And should you pass away with a tax-advantaged fund in your possession, your beneficiary will not be faced with the same kind of taxes that the owner of a variable annuity would. If sold shortly after your passing, the heir would be unlikely to receive any taxes at all. The single advantage of an annuity is that investors using more aggressive tactics would be able to bring balance to their portfolios by transferring investments between sub-accounts without worry of extra charges being made on their funds. However, this is not a strategy that many people would employ, as it is typically better to stick with a steady investment than to chase money in a market that is changing every day.

Connor Swinney is the owner of the What Are Mutual Funds website. He created the website to be used as a resource for people who are looking for more information on Extra Mutual Funds Performance Information or that would like to know how they can create a successful investment strategy.

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Mutual Funds


Annuity Vs Mutual Fund


Variable Annuity

Forex dealing is dealing in currency trading and basically includes dealing in foreign exchange while the stock market dealing is the dealing of stock in a standard market market. The two types of

By: Anil Mali l Investing > Stocks l October 25, 2012 lViews: 245

Investments in silver metal can be done by several ways. The article talks about the best ways of silver investments. Silver, the precious metal has always attracted investors for several reasons.

By: Kyles Humphrey l Investing > Gold Silver l August 17, 2012 lViews: 305

The article offers reasonable reasons for high oil prices. Crude is indispensable and it is a great source of energy. The prices on oil keep on altering, sometimes it is too high and sometimes it

By: Kyles Humphrey l Investing > Stocks l August 17, 2012 lViews: 286

Many investors are unaware of new tax that will be levied as part of the Supreme Court’s decision to uphold President Obama’s health care reform. The investment tax, as it is being referenced,

By: Ben Esget l Investing > Retirement Planning l July 17, 2012 lViews: 405

A few months ago, I was at Starbucks talking to someone about stocks and bonds, he and his wife had worked hard and were worried about the stock market. They wanted something much less risky. He

By: Lance Winslow l Investing > Stocks l July 11, 2012 lViews: 434

The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning.

By: Lawrence Tepper l Investing > Retirement Planning l July 10, 2012 lViews: 240

According to financial experts, mutual funds shouldn't be selected merely on the basis of past performance and fundamental analysis of indices. First of all, you need to understand that investments

By: Shabbir Bhimanil Investing > Mutual Fundsl June 16, 2012 lViews: 190

Mutual funds are a type of certified managed combined investment schemes that gathers money from many investors to buy securities. There is no such accurate definition of mutual funds, however the

By: Vaibhav Bhadangel Investing > Mutual Fundsl June 06, 2012 lViews: 223

Mutual fund investments can give investors high returns when they succeed in choosing the best mutual funds. The best mutual funds are those that facilitate diversified and multiple stocks purchase,

By: Wayne A Gormanl Investing > Mutual Fundsl May 30, 2012 lViews: 213

Past performance isn't a proper indication of future overall performance. A poor-performing fund which had massive deficits in one year shouldn't be considered to do similarly in the subsequent year,

By: Alisia Matthewsl Investing > Mutual Fundsl May 25, 2012 lViews: 192

In case you are wondering if there are risks in investing, the answer is yes. Although investing in a cash ISA involves little risk, there are higher risks involved with regards to stocks and shares

By: Gert Hael Investing > Mutual Fundsl May 22, 2012 lViews: 204

There are many advertisements offering to sell you techniques labelled how to make money the easy way but the experts know that these get rich quick schemes are a sham; just a way to separate any

By: Jack Ritchiesl Investing > Mutual Fundsl May 21, 2012 lViews: 346

Are you interested in investing in foreign currency mutual funds? This can be a very successful investment, but first you must take the proper steps to educate yourself as to what you'll be getting

By: Connor Swinneyl Investing > Mutual Fundsl March 22, 2012 lViews: 211

Alternative investment mutual funds are mutual funds that invest in assets aside from traditional investments, such as money market instruments, stocks, and bonds. These investment vehicles are

By: Connor Swinneyl Investing > Mutual Fundsl March 12, 2012 lViews: 180

High dividend mutual funds are distinct in that the companies who run them choose to only invest in high yield dividend stocks. These kinds of investments can be a great way to save for retirement,

By: Connor Swinneyl Investing > Mutual Fundsl March 12, 2012 lViews: 163

So, you've heard that it's important to check out a mutual fund expense ratio before investing in one. But what makes that so important? A mutual fund expense ratio is a glimpse at how much money is

By: Connor Swinneyl Investing > Mutual Fundsl March 12, 2012 lViews: 170

There are many investors who are in search of the top 10 mutual funds to buy from the past year. The year 2011 saw another year where just about everything in the investment world worked out smoothly.

By: Connor Swinneyl Investing > Mutual Fundsl March 12, 2012 lViews: 162

The most typical kind fund offered by investment providers is an open ended mutual fund. What makes an open ended fund open ended is the fact that the amount of investors, shares, and fund size in

By: Connor Swinneyl Investing > Mutual Fundsl March 12, 2012 lViews: 176

Discuss this Article

comments powered by Disqus