Question

An investor looking for which of the following investment goals would be BEST served by a deferred variable annuity?

1. Investors seeking capital appreciation over a long period of time
2. Investors looking to maximize their current level of income
3. Investors interested in receiving inflation adjusted returns

Answer 1

1. Investors seeking capital appreciation over a long period of time

Step-by-step explanation:

Deferred variable annuity are designed to provide long term capital appreciation. They do not provide immediate income. They do not adjust their return for inflation and they are not fixed rate securities.

A variable annuity is a tax-deferred retirement vehicle that allows you to choose from a selection of investments, and then pays you a level of income in retirement that is determined by the performance of the investments you choose. Compare that to a fixed annuity, which provides a guaranteed payout.