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An annuity can help boost your retirement savings

If you've contributed all you can to your tax-deferred retirement accounts, a variable annuity can help you save even more.

What's a variable annuity?

A variable annuity is a tax-advantaged way to save for retirement without some of the limitations of other retirement accounts, such as 401(k) plans and IRAs. Your earnings grow tax-deferred year after year and have the potential for market-based investment growth.

Why choose a variable annuity?

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To save more

If you've saved the maximum in your 401(k) and IRA but wonder if that's enough to meet the challenge of financing your retirement, a variable annuity is an option.

Unlike other retirement savings products, there's no limit to how much you can invest on an after-tax basis or for how long, although there may be age and premimum restrictions for specific products. (There are limits to annuities funded with pre-tax money.)

A word about costs

Because variable annuities are insurance contracts that carry extra costs in return for guaranteed income, they're usually considered the last part of a retirement savings plan.*

To manage taxes

A tax-deferred variable annuity gives you some control over your tax liability, now and in the future. You can:

  • Reduce your overall taxable income, since returns on investments in tax-deferred accounts are excluded from current income.
  • Receive income from the annuity when it's favorable to you—such as when you may be in a lower tax bracket. Like an IRA, you pay taxes on earnings when you withdraw them.
  • Change investments among the portfolios without triggering taxes if your investment goals change.

To have investment flexibility

A variable annuity generally invests in portfolios of mutual funds. You benefit from potential long-term growth and exposure to the broad stock and bond markets, while assuming market risk.

Highlights of the Vanguard Variable Annuity

Low costs. Average costs are 70% less than the industry average.§

Highly rated insurers. Leading independent rating agencies give our insurers, Transamerica Premier Life Insurance Company and, in New York State only, Transamerica Financial Life Insurance Company, high ratings for financial strength.**

Investment control. You manage your account and can make tax-free transfers among a diverse lineup of 19 stock, bond, and money market portfolios.

Income flexibility. You have 2 options to draw income from your investment when you're ready—adding the Secure Income™ rider to your Vanguard Variable Annuity or setting up a withdrawal strategy.

Need help choosing investments?

Our investor education area can help you get off to the right start.

Choosing Vanguard for an annuity

When you buy a variable annuity through Vanguard, you'll work with unbiased associates whose only goal is to help you make the right decision.

How annuities work at Vanguard

We make it easy for you to purchase an annuity. We start with a free annuity "checkup" from an unbiased Vanguard annuity specialist who doesn't work for commissions.

Call 800-853-7107.

Get started

Our licensed annuity specialists are here to help.

Call 800-853-7107

Monday through Friday
8 a.m. to 8 p.m., Eastern time

Save more for retirement

INVEST IN THE VANGUARD VARIABLE ANNUITY

Choose from a diverse lineup of stock, bond, and money market portfolios.


Do you have an annuity somewhere else?

If you have a variable annuity with another company, you may be able to save money by moving it to Vanguard. The Vanguard Variable Annuity costs 70% less than the industry average.§

Have you inherited an annuity?

You could save money by transferring your inherited annuity to the Vanguard Variable Annuity.

Managing your Vanguard Variable Annuity

There's a lot you can do online to manage your Vanguard Variable Annuity.


Get complete portfolio management

We can custom-develop and implement your financial plan, giving you greater confidence that you're doing all you can to reach your goals.

Retirement: The basics

Balancing your retirement goals can be challenging, but we can help you find solutions that work for you.

See the benefits of investing more at Vanguard

As your assets grow with us, you'll gain access to personal attention, lower costs, and more.

REFERENCE CONTENT

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401(k) plan

A type of employer-sponsored retirement savings plan that allows employees to contribute pre-tax dollars by deferring salary. Many plans offer a variety of investment options, and employers often match a percentage of employee contributions.

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Variable annuity

A contract issued by an insurance company, which agrees to make payments to you based on the contract's value. The value varies based on the annuity's underlying investments.

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Managing your Vanguard Variable Annuity

To access your annuity online, log on to your account or register for online access if you haven't done so already.

Once you've registered, you can make exchanges between annuity portfolios online.

You can also log on to check the following:

  • Your contract balances.
  • The status of pending and processed transactions.
  • Information on death benefit and Guaranteed Lifetime Withdrawal Benefit riders.*
  • Statements and confirmations.

If you have any questions about your annuity, call one of our licensed specialists at 800-357-4720 Monday through Friday from 8 a.m. to 8 p.m., Eastern time. We're always happy to help.


footnote*Product guarantees are subject to the claims-paying ability of the issuing insurance company.

footnote5208 (3/18)

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IRA

A type of account created by the IRS that offers tax benefits when you use it to save for retirement.

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Tax deferral

Delaying the payment of income taxes on income. For example, owners of traditional IRAs do not pay income taxes on the interest, dividends, or capital gains accumulating in their retirement accounts until they begin making withdrawals.

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After-tax contribution

Investments in a retirement plan that come from the taxable portion of an employee's pay.

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Portfolio

An investment option—offered by an annuity—that holds a range of underlying investments.

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Returns

The profit you get from investing money. Over time, this profit is based mainly on the amount of risk associated with the investment. So, for example, less-risky investments like certificates of deposit (CDs) or savings accounts generally earn a low rate of return, and higher-risk investments like stocks generally earn a higher rate of return.

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Mutual fund

A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.

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Stock

Usually refers to common stock, which is an investment that represents part ownership in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits.

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Bond

A loan to a corporation, government, or government agency in exchange for regular interest payments. The bond issuer agrees to pay back the loan by a specific date. Bonds can be traded on the secondary market.

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Market risk

The possibility that stock or bond prices overall will decline over short or even extended periods. Stock and bond markets tend to move in cycles, with periods of rising prices and periods of falling prices.

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Money market fund

A mutual fund that seeks income and liquidity by investing in very-short-term investments. Money market funds are suitable for the cash reserves portion of a portfolio or for holding funds that are needed soon.

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Variable annuity

A contract issued by an insurance company, which agrees to make payments to you based on the contract's value. The value varies based on the annuity's underlying investments.

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Pre-tax contribution

Investments in a retirement plan made with funds from an employee's paycheck before federal income taxes are deducted.

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Commission

A fee charged by a broker for buying and selling securities.

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Earnings

The investment returns you accumulate on the savings in your account.