What Is a Variable Annuity?

Video Transcript

"This is financial adviser Patrick Munro today talking to you about variable annuities. Variable annuities are a vehicle that exists to allow individuals to participate in the traits of an annuity but still have full power of the stock market. Annuities by their very nature are safety instruments. So variable annuities are a version of what Wall Street allows for and the word variable in my opinion is not a good word if you're retired. I caution individuals with variable annuities because they can lose principle. And if you lose principle, you'll have problems over time accumulating enough money for income. For more information, you can go to sec.gov. SEC is a web site that's very useful. It's the Security and Exchange Commission web site. And from there you click on enforcement and from there you click on investor alerts and is says, "Variable Annuities - What you should know." And it's a tutorial on variable annuities that's peppered with cautionary warnings throughout. When you read those warnings and decide to place your money in variable annuities, please understand the risks that are associated with that. The returns can be great but the risks can be greater. This is financial adviser Patrick Munro speaking to you on variable annuities."