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What Are the Annuity Costs and Expenses?

Why this is important: Most annuities don’t have a single flat fee rate. Many have several layers of fees that, together, can add up to several percent and thousands of dollars annually.

The chart below highlights some common separately-charged fees and their hypothetical impact on a $100,000 investment in a variable annuity.

Over time, the few thousand dollars paid in fees each year can add up significantly, making it difficult to reach your retirement goals. Other investments may provide a less costly way to accomplish the same objectives.

1 Securities and Exchange Commission, Variable Annuities: What you should know, (Washington, DC: SEC pub 011, 09/2007), 11.
2 Insured Retirement Institute, 2011 IRI Fact Book (Washington, DC: IRI, 2011), 36-38, 56.

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