Variable annuities, I can hear people cringe at just the name, in IRA accounts, I think I just heard some people pass out! What am I insane to bring up this topic of putting variable annuities in IRA accounts? Maybe, but what is the big deal anyhow? There really is not any.

Think about all the different types of mutual funds that you can invest in. Now, can any of these mutual funds guarantee you: Your money back, either lump sum or through withdrawals? Can they guarantee you a withdrawal amount, without annuitization, for the rest of your life? Can they guarantee you a future income that can compound at anywhere from 5 to 7%? Or how about, can they guarantee your beneficiaries any amount of money? Can they provide your beneficiaries with an extra amount on the earnings in your account? The answer to all of those questions is no.

No other investment available can offer you any of the items listed above, except a variable annuity. People always say a variable annuity offers only tax deferral and high fees, that's it. That is not true. Through living benefits a variable annuity can provide you either; income for life, (not through annuitization either), guaranteed withdrawal benefits, guaranteed minimum income benefits and guaranteed account value benefits.

In today's world a variable annuity can guarantee what everyone wants, your money, sometimes more, back. Does a variable annuity have higher fees than a mutual fund, yes they do. Are they outrageously high like people say they are? Some are, but most are not. It is all what you make of it, not all variable annuities are created equally. Again, mutual funds cannot offer the same type of guarantees that variable annuities offer.

Most of the variable annuities on the market today offer optional benefits, which means you have more control over the cost. If you do not want a certain benefit, then you do not have to buy it. It has become that simple, you now have more control over your annuity fees than ever before in history.

A variable annuity is a long term investment. An IRA is a long term investment. Both of these accounts grow tax deferred and withdrawals are going to be taxes as ordinary income. The fees are not that much different than a mutual fund or a fee-based planner. The variable annuity offers you guarantees through living benefits, a mutual fund offers no such guarantee. IRA's are geared to give you income during retirement and so are variable annuities and, now with no annuitization living benefits, variable annuities can do this even more effectively than ever.

It is as obvious as night and day between what a mutual fund can offer and what a variable annuity can offer. With the annuity you now have the upside potential of the market, with total downside protection. With a mutual fund you do not have this at all. Under the umbrella of a variable annuity you have up to, in some cases, 90 investment options from different fund managers. With a mutual fund you have one investment manager and switching funds can generate fees.

The only type of annuity I say is a total waste in an IRA is a fixed annuity. You have a minimum guarantee, big deal. Typically, with a fixed annuity the teaser rates are high and the subsequent years interest rates are not very good. You may be better off in CD's, unless you can find a product, with no hidden surprises, that pays a set interest rate for the term of the annuity. Often times with fixed annuities, and definitely with equity index annuities, the surrender schedule is way to long. With equity index annuities, there are just too many moving parts and the rate of return is almost equivalent to a fixed annuity.

On every level an annuity now beats most investment options. Yes, there is a fee for this, but often the best things in life are not free. I believe the guarantee of getting more than your money back far out weighs the fee. If people would just look at the facts they would see a variable annuity makes more sense than any other investment inside of an IRA. To find the best variable annuity go to www.annuityiq.com.