Annuities - Variable Annuity Myths:Find A Financial Planner

John Pollock Financial, Phone # 972-396-0449, John Pollock is a Dallas Financial Advisor. http://www.johnpollockfinancial.com/financial-advisor/annuities/ It's hard to find a financial planner whose advice you can trust -- even among so-called experts. I'm looking at an article written by the Insured Retirement Institute called "Debunking Variable Annuity Myths". This group wants to dispel some 'myths' about my least favorite investment in the world, the variable annuity. Let's get it on!

It's easy to find a financial planner who believes these IRI studies, but be careful what you allow to affect your portfolio. Here's Myth 1: VA's Don't Belong in Qualified Accounts. The article cites Suze Orman, a financial commentator. She says VA's protect assets much differently from mutual funds, due to the guaranteed withdrawals, and the living benefits. So the benefits of the VA outweigh the tax benefits inside of a qualified account.

Have you been able to find a financial planner who can tell you if they successfully debunked this 'myth'? The answer here is no, they didn't. Actually, I don't think VA's belong in any accounts, qualified or otherwise. Suze Orman says VA's have an advantage because they grow tax-deferred. The problem is that growth is at regular income rates, not capital-gains rates. Even if capital-gains rates go up, they're still almost certainly going to be under regular income rates. There's no compelling benefit to being in a VA here. And the living benefits they talk about here are far cheaper to get in an insurance product, instead of a variable annuity.

Buy equities for what equities are for (and find a financial planner who will tell you that!) Buy insurance for what insurance is for. Take my advice -- don't mix them. They are better off separate than mixed. Myth 1 is NOT debunked. VAs still don't belong in qualified accounts.

I'd be hard pressed to find a financial planner that believes in this next myth. Myth 2: VA's Are Too Expensive. Really -- that's a myth? I want to see how they justify the way VA's rip people off. They say the average VA is only 3% to buy in. Well sure, that's true, but it's 3 ½ to 4 percent to own. The S&P only climbs at an average of 9%! How are you going to make any money when they are siphoning 4 percent of your investment off every year for fees! It's still too expensive. Myth 2 is not debunked. The fees are still WAY too high for what you're getting.

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[healtc50]

If a person is looking strictly at living off their retirement nest egg for income to compliment their social security benefits why not look at an insured investment like a VA that still allows me to be in the market but guarantee no declines in my income benefit even if my overlying portfolio goes down. Then when I retire I can trigger income from my annuity that doesn't rely on market performance to make sure I don't out live it. This benefit doesn't require annuitization either.