What is a variable annuity?

A variable annuity is a type of investment product that is often used for retirement savings. It is an insurance contract designed to provide income, typically during retirement. In a variable annuity, individuals make payments or contributions, which are then invested in a range of investment options, such as stocks, bonds, and mutual funds. The value of the annuity can fluctuate based on the performance of these underlying investments, which is why it is referred to as "variable." As individuals contribute to a variable annuity, they can choose how their money is allocated among various investment options, allowing for potential growth that can outpace inflation. Additionally, variable annuities often come with features such as death benefits and options for guaranteed income. It is important to understand the associated fees and risks, as well as the specific provisions of the contract. For more detailed information about variable annuities, it may be helpful to explore the resources available on the official VALIC website.