I’ve noticed an increasing number of people contacting me about variable annuities lately. I think this can be explained by a fear increase among investors. In the past investors may have been willing to forego a guaranteed income stream for the chance at having substantially more assets during retirement.

As most of my readers know, my blog is designed to inform clients about issues related to financial planning, investment products, and the economy. Lately I’ve been fielding more questions than usual about the various annuity products out there and which ones are best, the worst and potentially the most interesting.

Welcome to one of the most misunderstood financial products out there. It’s no surprise how little most investors know about variable annuities because they’re extremely complicated and their explanations often come from insurance brokers and financial advisors who often don’t adequately explain their potential benefits and drawbacks.

The chatter surrounding variable annuities is louder than ever. Investors want security regarding their money in the face of increasing amounts of uncertainty about the future.

An annuity is a stream of income.  A purchaser makes periodic or one-time payments during the “accumulation phase” of an annuity so that at some point in the future they can trade those payments in for a stream of income.