# Variable Annuity

*Retirement & Benefits — Finicade finance glossary*

A variable annuity is an insurance contract holding investment sub-accounts, wrapping market exposure in guarantees and tax deferral. The guarantees are real and the cost is high: total fees of 2–3% a year plus surrender charges lasting years are common. They are frequently sold into accounts that are already tax-deferred, such as an IRA or 403(b), where the tax benefit is worth nothing and only the fees remain.

**Also known as:** variable annuities, annuity contract

**Related terms:** [Annuity](https://finicade.com/glossary/annuity), [403(b)](https://finicade.com/glossary/403b), [Expense Ratio](https://finicade.com/glossary/expense-ratio), [Surrender Charge](https://finicade.com/glossary/surrender-charge), [Longevity Risk](https://finicade.com/glossary/longevity-risk)

Source: https://finicade.com/glossary/variable-annuity