Skip to main content

Are you paying too much for your annuity?

If you own a variable annuity with another company, check the costs. Don't let fees offset the tax advantages.

Why transfer your annuity?

The answer really comes down to costs.

A variable annuity has costs that other investments don't—such as mortality charges, administrative fees, and surrender charges. These fees are in addition to the underlying operating costs—the expense ratios—of the investments you choose.

Costs are one aspect of investing you can control—and if you evaluate your options carefully, there's no reason to pay more.

The average cost for the Vanguard Variable Annuity is 70% less than the industry average. That difference can save you an average of $1,700 a year in fees for every $100,000 you invest.§

Lower costs can lead to bigger investment returns

A chart showing how Vanguard's lower average expense ratio compared with the industry average expense ratio can lead to bigger investment returns

This hypothetical example assumes a 6% return on a $100,000 investment.

Source: Morningstar, Inc., as of December 2017.

Other considerations that may factor into your decision to transfer your variable annuity:

  • Is the quality of service what you expect?
  • Does the product meet your goals?
  • Are you paying for benefits you won't use?
  • Did you inherit an annuity with high costs?*

The Vanguard Variable Annuity advantage

With a Vanguard Variable Annuity, you receive some of the lowest costs in the industry offered through a diverse fund lineup and backed by a highly rated insurer.**

Expand all

Collapse all

Diverse fund lineup

Choose from a diverse lineup of stock, bond, and money market portfolios, many of which are built from Vanguard mutual funds.

No commissions

You buy a Vanguard Variable Annuity directly from us so you pay no commissions or purchase fees. And there are no surrender charges if you change your mind later.

Investment flexibility

If your investment strategy or financial goals change over time, you can exchange assets among portfolios without paying a fee or triggering a taxable transaction.

Income option

You may decide to use your variable annuity as an income source in retirement. If so, you can purchase a rider for an additional fee to add to your contract at any time (up to age 91) that will allow you to start and stop payments according to your needs.

See how much you can save

Try our calculator to help you decide if transferring to the Vanguard Variable Annuity is the right move for you.

How annuities work at Vanguard

We work for you

Our annuity specialists are licensed professionals who will walk you through the decision-making process—regardless of whether you transfer your annuity to us or stay with your current provider.

During your free annuity "checkup," we'll compare fees and other expenses, calculate your potential savings, and see if your contract is eligible for a 1035 exchange—a tax-free transfer from one company to another.

Our unbiased annuity specialists don't work for commissions so they only have your interests in mind.

Call 800-806-6616.


Have you inherited an annuity?

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

Managing your Vanguard Variable Annuity

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

Find out how to manage your annuity

Get started

Our licensed annuity specialists are here to help.

Call 800-806-6616

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

INVEST IN THE VANGUARD VARIABLE ANNUITY

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


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

Layer opened.

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.

Layer opened.

Mortality & expense risk charge

A fee included in some annuity contracts that compensates the insurer for the risks it assumes in issuing the contract, such as the cost of death benefits, expenses of other insured income guaranteees, and administrative costs.

Layer opened.

Surrender charge

A fee that may be charged on withdrawals or surrenders from an annuity before annuity payments have begun.

Layer opened.

Expense ratio

The annual operating expenses of a mutual fund or an ETF (exchange-traded fund), expressed as a percentage of the fund's average net assets. It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you’d pay about $20 a year out of your investment returns.

Layer opened.

Lower costs can lead to bigger investment returns

This chart shows how costs can significantly impact returns on your annuity investment. It illustrates the growth of a $100,000 investment over 10, 20, and 30 years, factoring in a 6% annual return and annual investment costs—0.50% annually for the Vanguard Variable Annuity and 2.24% annually for the annuity industry average.

Over 10 years, the Vanguard Variable Annuity returned $170,329, compared with the annuity industry average of $142,781.

After 20 years, the Vanguard Variable Annuity returned $290,121, compared with the annuity industry average of $203,864.

By 30 years, the Vanguard Variable Annuity returned $494,161, compared with the annuity industry average of $291,080.

Layer opened.

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.

Layer opened.

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.

Layer opened.

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.

Layer opened.

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.

Layer opened.

Commission

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

Layer opened.

Purchase fee

A fee charged by a company to purchase an investment product.

Layer opened.

Portfolio

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

Layer opened.

Rider

A provision added to an insurance contract that offers more benefits at an extra cost.

Layer opened.

1035 exchange

The exchange of an annuity owner's assets from one company to another without incurring income taxes. The annuity must be funded with after-tax contributions to qualify.

Layer opened.

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.

5208 (3/18)