Investing in Retirement Funds Difference in mutual funds and fixed/ variable annuities Structure of mutual funds and fixed/variable annuities Types of variable annuities Read your performance report

Mutual Funds Investment vehicle No tax advantage for capital gain and distributions

Variable Annuities Tax advantage Investment and annuitization: guaranteed payments for life –Providing retirees with guaranteed retirement income for the rest of their life –Lifetime income payout option that a retiree can elect to get a rate for the payout period at today’s purchase rate. –Minimum death benefit guarantee: if the policyholder dies while still saving for retirement, his or her heirs will receive the greater of the amount of money invested or policy’s value at the time of death. –Having a mortality charge

Value Measures Mutual funds are measured with NAV (net asset value) = aggregate value of a fund/shares outstanding Variable annuity is measured using “unit value” –Accumulation unit value (accumulation period) –Annuity unit value (payout period)

Different types of funds and annuities Growth Value Income Blended Large cap Small cap Mid cap

Consider risk when comparing returns