How would you like the peace of mind knowing you'll have guaranteed income after retirement? An annuity can do just that! Annuities are products that provide a stream of income for its investor based on the return earned and the amount of deposited.

There are two types of annuities: fixed and variable. With a fixed annuity, the investment provider (insurance company) can guarantee a specific monetary disbursement to the investor (accountholder) based on the initial investment. The investor can receive same payment for the life of the contract and this makes fixed annuities popular among those nearing retirement. Fixed annuities have a specific rate of interest for a certain timeframe. On the other hand, when variable annuities are purchased from an investment provider, investments are made into sub accounts of the investors' choosing. The sub-accounts are similar in nature to mutual funds and can be very diverse. The investor could receive higher payments depending on performance of these sub-accounts. Variable annuities offer a greater opportunity for growth, but they also have higher risks.

One thing both types of annuities have in common are the additional fees associated with these accounts. Fixed and variable annuities include many different expenses in order to guarantee income for life. When comparing investment providers, be sure to ask for a "break down" of fees included in the contract. Here are some of the most common: insurance charges, the mortality and expense fees (also called M&E fees), administrative fees, distribution fees, management fees, surrender charges and early withdrawal fees. A financial representative assisting you is normally compensated from a portion of the fees paid. There may also be wrap fees, riders, and optional feature fees. We encourage you to obtain an itemized list of expenses.

The Open Architecture Platform is a listing of mutual funds that an investor can choose from. You would have the opportunity to determine which investments and allocation of money are ideal for your specific needs. There are many different funds to invest in and each of them has their own unique qualities. Some are great for capital growth, some are best for income after retirement, and others offer lower risks. Since open architecture platforms are not overseen by a professional portfolio manager, it is critical the investor evaluate their investment goals and closely review the different funds. If an investor would like the assistance of a financial advisor in order to manage the mutual funds, it is available at an additional cost.

Mutual funds are a great way to get diversification for your portfolio. You can invest in money-markets, stocks, bonds, as well as other securities. The main type of mutual fund is open-ended. This means you can buy and sell it at any time. There are also "load" and "no-load" mutual funds. Load funds tend to carry a sales commission for the purchase of the mutual fund but no-load funds do not. Here are some of the other associated fees: management fee, the 12(b)-1 fee, custodial fees (or account maintenance fees), as well as the sub TA fee.

When narrowing down your choices, be sure to inquire if the mutual fund(s) comes in a low cost version. We also strongly encourage you to obtain some sort of itemized list of expenses as well as gain a favorable understanding of any potential fee associated with the mutual fund. This list of expenses can be found in the prospectus given to you at the time of investment.