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I have a number of Variable Annuity contracts with National Life, Phoenix Life, Prudential, John Hancock, and Vanguard. I have found them to be better than Mutual Funds as I can switch funds from one portfolio to another. Every quarter I switch to the top performing ten or twenty portfolios in each of the Annuity contracts.<br> There is no capital gains tax to worry about in switching, no short term termination fee, no income tax on the income earned in the portfolio. There are expense and administrative fees, but they are also charged by Mutual Funds. The Annuities have a Mortality charge which is objectionable but I think the trading advantages mentioned above outweigh this cost.<br> The real disadvantage of Variable Annuities is that they are annuities which you can not gift without paying an income tax. You didn't know that.
By James Brady
