Some financial planners are upbeat about variable annuities while others avoid them. However you feel about variable annuities, there’s no doubt that they’re ubiquitous: Morningstar reports that VA net assets reached a record $1.87 trillion at year-end 2013. Chances are that some of your clients hold VAs, including contracts acquired during a prior advisory engagement.

Deferred annuities such as VAs are designed to be retirement income vehicles—that’s why taxes on investment earnings are deferred. Given their nature, does it make sense for retired clients to annuitize their VAs for spending money?

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