Variable annuities


Q. Why are variable annuities such a bad retirement option? I have seen this stated many times, but I’m still not sure why this is the case. On the other hand, I’ve almost never seen any investment outperform the TSP stock funds on a long term basis. I have rebuffed the efforts of my financial adviser (and many other advisers during lectures) to get me to roll over the TSP to “more flexible” IRA options.

A. Because they are expensive. Keep your money in the TSP. Your financial adviser is a salesperson who wants the big fat commissions you’ll pay through the annuity. Find a real financial adviser or go it alone. You’ll be better off.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at


  1. variable annuities are designed for guaranteed lifetime income. They are the only investment option that offers this feature, but that feature costs money to provide, thus they are more expensive than some other investment options.

    If you don’t want guaranteed lifetime income, you are better off going at it alone, and saving a little on fees.

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