In stark contrast to a fixed annuity, variable annuities have greater growth potential but can bring risk and lose money. Variable annuities allow you to set aside money for a specified time in the future. The benefits of a variable annuity are:
- Tax-deferred growth potential in the accumulation phase
- Death benefits for your loved ones or charities
- Tax-free/penalty-free transfers among underlying investment options
- Various payout options including systematic withdrawals and annuitization