Is a variable annuity is right for you? This is a tough question. Lets take a look at some broad examples to see if an annuity is right for you.

First, do you need the money liquid, or will you need your money quickly in the near future? If you answered yes, then no a annuity, and especially a variable annuity, is not right for you. If you do not need your money for at least 7 years then a variable annuity is maybe right for you.

Second, how much of your money are you looking to put into a variable annuity? If you answered over 25%, I would have to advise against using a variable annuity. Putting too much money into an annuity is a bad idea. Using an annuity as part of your long term objectives is fine, but you will always have unforeseen emergencies come up.

When you have one of these emergencies an annuity will take too long for you to get your money to meet your immediate needs. The exception to this rule is if you are using the annuity for an IRA account. Since IRAs are illiquid and considered long term investments, it may be suitable to put in more than 25% of your assets into an annuity. IRAs are usually the biggest portions of our portfolios, so it usually will comprise more than 25% of our assets. Still age and time frame play a roll in making that kind of decisions, and you should consult a financial advisor for more information.

Third, will a variable annuity meet your needs? You should be fairly sure that the annuity will meet your long term goals. You should not buy an annuity if you have no need for the benefits. Why pay the extra expense for a living benefit, M&E charges and sub-account fees if you have no plans on utilizing the benefits in the future. I mean, if you think the market will do well and are comfortable taking full market risk, then there is no point to owning a variable annuity. If you want guarantees, plus market exposure, then the extra cost maybe worth it.

Fourth, are you in a high tax bracket, over 25%? If you answered yes, then a variable annuity may be right for you. The higher your tax bracket, obviously, the more you are paying in taxes. If you do not need the money now and are not using it, why pay taxes on it? However, if you are in a lower tax bracket you should evaluate the need for a variable annuity. It may not be in your best interest to own a tax deferred vehicle.

You should always seek independent, personalized financial advice. Without a one-on-one consultation no one can say whether an annuity is right or not to meet your long term needs. Even if you consult a professional, you need to know what the best annuities are. You have three choices to finding the best annuities available.

These choices are:

1.Do your own research. This will take you hours, if not days, and your head will be spinning afterwards. There are more legal terms and just plain weird terminology in the insurance world that you will not be familiar with.

2. Trust your financial advisor. To me this is not the best answer. I love financial advisors, but I also know how they think. When you throw the smell of a sale and commission dollars, they tend to think more about what is better for them, rather than what is best for you.

You need to do your research on variable annuities. Unfortunately there are very few places to get truly unbiased annuity research. You first step would be to get the prospectuses and sales material; this will help you get the facts. Call different brokers and get their opinions as well this could help get a more balanced approach to what others are recommending. Once you have that get the prospectuses and see what the small print says, thats the fun part.

After you do the research you can then make a good solid decision. That is the key part, making a sound decision based on facts, not in the heat of the minute in the middle of a sales pitch. Making the right decision now will save you thousands in the future.

For more annuity research and reports go to www.annuityiq.com.