Variable annuities, extremely popular retirement investing vehicles, have taken a beating in this bear market. Companies like Hartford (Stock Quote: HIG) and Principal Financial (Stock Quote: PFG) have suffered tremendous losses. The underlying investments of variable annuities—known as mutual fund subaccounts—have lost value right along with the broader market. The one saving grace to owners of variable annuities have been what are known as guaranteed minimum income benefit or guaranteed minimum withdrawal benefit riders.

Despite their beating, variable annuities could still be a viable alternative in your retirement planning if you buy them for the right reasons. Following is an excerpt from Ratings Consumer Guide to Variable Annuities that discusses some questions you should ask yourself about whether or not a variable annuity is right for you.

Now that you are familiar with how variable annuities work, including their inherent advantages, disadvantages, tax considerations, and mutual fund considerations, you are in a much better position to determine whether or not they’re right for you. Keep in mind though, it is usually a good idea to consult a professional such as a Certified Financial Planner before making any major moves in retirement planning.

You should consider variable annuities if:

1. You can make a long-term financial commitment for retirement, and you are confident that you won’t need access to your money before you retire.
2. You have already fully funded any company-sponsored retirement plans or IRAs for which you are eligible.
3. You can take full advantage of tax-deferred growth of your investments. This is especially appropriate if you are inor enteringa high marginal tax bracket and are at least six years away from retirement.

4. You need to shelter your savings from potential lawsuits and make it less accessible to the courts.
5. You feel up to making your own investment decisions, or alternatively, you have a financial advisor you can rely on.
6. You have already established a source of liquid assets that you could tap in case of an emergency. Remember, it will be costly if you ever need to withdraw money from an annuity before retirement.

You'll probably want to avoid variable annuities if:

1. You have not yet fully funded any company-sponsored retirement plans or IRAs available to you.
2. The ups and downs of the stock market make you nervous and you are averse to the risks associated with mutual fund investing.
3. You know little or nothing about mutual fund investing and are not interested in learning.
4. There is a good chance you will need the money before retirement for living expenses, emergencies, long-term care or other investment opportunities you may want to pursue.

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