Comments on: Ben Stein’s Parents are Well-Off Thanks to Variable Annuities

By: TJ

TJ — Wed, 17 Nov 2010 22:17:55 +0000

“I’ve generally been strongly against variable annuity products, especially after hearing story after story of elderly people being encouraged to enroll their life savings into products from which they would be unlikely to receive a benefit worth the fees.”

You need to re-look at VA’s. Those stories are from the ’80s, and the products of totally are a totally different animal. While some have a surrender charge (often on a 7 or 8 year schedule), that’s completely different than the 25 year deferred VAs that some companies sold to 85 year old women in the ’80s. Contact some of the large companies and sit with their agents to figure out how the fees / provisions work… I guarantee you that you’ll be blown away with the changes that companies have made.

Dwayne mentioned how the fee structure is actually very reasonable; this is one change that companies have made over the past few decades. You’d be hard fought to find cheaper products for the same level of management and benefits that VAs can offer. Just be sure to choose a respected, good, solid company (I suggest mutual).

By: Dwayne

Dwayne — Wed, 22 Jul 2009 19:53:41 +0000

Please check out the article in todays (07/22/09) Wall Street Journal. Finnaly even the “so called” pundits have admitted they were wrong and Variable annuities can be a great addition to your investment portfolio. In fact now they are saying that the fees are not high enough. Imagine that, when the market is doing well they have no use for them, but all of a sudden when the market does’t do well they change their minds. Idiots like Suze Orman and Clark Howard should hang their head in shame!!!

By: Jonathan

Jonathan — Sun, 09 Mar 2008 01:50:48 +0000

I read a few of Ben’s books (Yes, You Can Still Retire Comfortably and Yes, You Can Be A Successful, Income Investor) and I gave the first one as a gift to both of my sisters.

In the first book Ben mentions that for someone of good health (typically the type of people who go for these) it could well be beneficial. He strongly cautions aginst the esoteric nature of these complex financial instruments (think life insurance type complexity) and I agree they could have their place in these limited situations.

By: dong

dong — Wed, 27 Feb 2008 03:35:27 +0000

I think Ben Stein’s parents have probably had a better experience with variable annuities because I have to assume as academics they invested via TIAA-CREFF which is not the bloodsucker that many of the companies offering variable annuities are. As a vehicle variable annuities have their place and purpose. The problem is that they are so laden down with fees and extra charges that the benefits are often wiped out. Ben has good points, but finding a worthwhile variable annuity offering is more easily said than done.

By: Jeremy

Jeremy — Tue, 26 Feb 2008 17:10:53 +0000

Just like any investing vehicle, VAs do have their place in certain circumstances with certain types of people. Like Ben said, anyone with reasonable abilities and knowledge in regards to investing, there are obviously much better ways to put your money to use.

But some people will never have the ability or even desire to set up their investment portfolio, or maybe they just really want to have that guarantee of income.

While I won’t recommend them, I see people doing more harm to their finances with other investment vehicles than a VA could ever do.