Recent life and family changes caused me to reevaluate my retirement planning, and this variable annuity came highly recommended by my financial advisor.  Having no experience with annuities, I had a lot of questions, and this one is a challenge to understand--but once you 'get' it, it's a beauty. This is a very powerful investment tool for someone with very long term retirement goals, who can afford to keep money tied up and not liquid. The first nice thing to like in an uncertain economy is that your investment (your protected withdrawal value, what you have put into it) is completely insulated after a certain number of years against market downturns. But the basis for figuring retirement distributions is the *real *attraction, especially if you can invest in this fairly early on and for the long-term. Every day the annuity's highest rate is captured, and **that** value is locked in and grown at an annual 7% compounded rate until you begin to withdraw money in retirement. So as the annuity makes new highs, your investment's payout base grows faster--and the payout base will never dip below its highest daily value, even if the underlying investments decline.  The payout rate starts at 5%, and once you begin taking withdrawals the additional 7% is not added, but your payout rate will always be locked in as a percentage of the highest daily value.  Pretty neat.  Plus, as you age, there are step-up payout percentage benchmarks, doubled minimum base rates at 10, 20 and 25 year anniversaries, and also some other features for spouses, beneficiaries and for increased payouts for unusual circumstances. I keep looking for the loopholes, and so far, haven't found one--but for me, this remains a very complicated instrument to understand, and might not be suitable for everyone due mainly to its illiquidity.  

Jchanyo

Stamford, CT