Sound Advice

Here’s Why You Shouldn’t Buy a Variable Annuity? A variable annuity isn't inherently a bad product. In the right situation—typically someone who has already maxed out other tax-advantaged accounts, wants tax-deferred growth, and values guaranteed lifetime income—it can make sense. Still, many financial advisors argue that most people pay more than they receive in benefits. Here are the biggest reasons. 1. High fees eat away at returns Variable annuities often layer multiple fees: Mortality and expense charges: 1.0%–1.5% Investment management fees: 0.5%–1.5% Rider fees (income or death benefits): 0.5%–1.5% Administrative fees It's not unusual for the total annual cost to exceed 2%–3% , which can substantially reduce long-term growth compared with low-cost index funds. 2. Investment gains are taxed as ordinary income Unlike stocks held in a taxable brokerage account, where long-term gains receive preferential capital gains tax treatme...

How likely is a major stock market pullback this year? A major pullback is possible this year, but not something anyone can time with confidence . The sources I found point to a market that is still supported by strong earnings expectations and AI enthusiasm, while also looking vulnerable because valuations are rich and surprises can hit hard. How to think about the odds A 5% to 10% drawdown is fairly normal in most years, and some commentators say 2026 already looks close to that range. The bigger risk is a correction or sharper pullback if earnings disappoint, inflation reaccelerates or geopolitics and policy shocks shake confidence. At the same time, some strategists still expect the bull market to continue, which means the market is not uniformly flashing recession or crash signals. What raises the risk High valuations leave less room for error. Concentration in a few large stocks makes indexes more fragile if leadership wea...