Charges, Fees & Optional Guaranteed Benefits
The traditional IRA versus variable annuities shows that both can have fees and charges attached to them that depend on such things as what financial institution or insurance company they are with, what the investments are and how the account is managed.
Variable annuities have their own fees and charges that vary from company to company and some of them do lend themselves to criticism. Some common fees are: annual fees, administrative and mortality and expense charges, front-end load charge (sales commission), and surrender charges.
Variables do offer optional guaranteed benefits that can act as insurance for a retirement account. Some of these are: Guaranteed Death Benefit, Guaranteed Earnings Increase Death Benefit, Guaranteed Minimum Income Benefit (GMIB), Guaranteed Minimum Withdrawal Benefit (GLWB), and Guaranteed Minimum Accumulation Benefit (GMAB). Any of these benefits can be added to a variable annuity contract and they all do not cost the same but they can be important to an investor when trying to fit a variable annuity into a retirement investment portfolio.
IRAs can also produce fees and charges. Some of these are: annual fees from financial services firms, transaction fees for the purchase or sale of investments, administrative fees, and fees for managed accounts.