A variable annuity can be a smart way to build extra savings for retirement. That's because the annuity lets you put more money away than other tax-favored retirement savings accounts, such as IRAs or 401(k)s.
As you've probably heard, variable annuities also can have their downsides—many of them have high costs that eat away at your investment returns. Those costs, which can include commissions, investment expenses, and withdrawal penalties, can offset the benefit of additional tax-advantaged savings that you get with an annuity. And it can be tough to figure out how much you're really paying because of the complicated terms of your annuity contract.
Vanguard offers one of the lowest-cost annuities in the industry.* If you own a variable annuity outside of Vanguard, you've now got a quick way to cut through the complexity and find out if you may be paying too much. Answer 3 simple questions and our new online calculator will show you how your current annuity's annual costs compare with those of the Vanguard Variable Annuity.
"We're excited to offer a simple-to-use calculator with cost information for nearly 1,500 annuities," said Tim Holmes, who leads Vanguard Annuity and Insurance Services. "In less than a minute, you can enter information about your current annuity to see how much you might save with the Vanguard Variable Annuity. Why not make sure you're saving all you can for retirement?"
What you can do if you think you're paying too much
You may be able to pay a lot less by making a tax-free transfer (called a 1035 exchange) to a Vanguard Variable Annuity. The Vanguard Variable Annuity's average annual costs are about 75% less than the industry average.*
Before you transfer your annuity, keep in mind that your current provider may impose withdrawal penalties, known as surrender charges.
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