Variable Annuity (VA)

While labeled an annuity, Variable Annuities are primarily sold for their accumulation, or wealth-building, potential as opposed to their ability to create income streams. The premium paid into a Variable Annuity gets invested in market funds of your choice, with gains from those funds growing tax-deferred. Typically, the VA will offer principal protection so that you don’t lose money, but it will also charge high annual fees that significantly reduce your money’s growth. VAs also offer Income Riders, at a cost, which will create a stream of income payments starting in the future.