Understanding the Details of a Variable Annuity 401k

When investing in a variable annuity 401k, there are several things that you will need to consider. In order to make sure that you make the right investment decision, you need to understand the basics of the variable annuity.

Variable Annuity 

If you decide to invest in a variable annuity, you will be buying a contract with an insurance company. The variable annuity will allow you to create an investment that will pay you a monthly payment once you are retired. You can set aside a portion of the money that you contribute to your 401k towards the purchase of the annuity.


With the variable annuity, you will be making your own investment decisions. The annuity provider will give you a list of potential investments that you could put your money in. Most of the time, you will be able to choose between a number of different mutual funds, but some annuities provide more options. The amount that you earn will depend on how the individual investments perform.


The variable annuity is made up of two different phases. You will first have the accumulation phase, which is when you pay into the annuity. Then you will have the payout phase, which occurs when you start taking monthly payments.

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