Variable Annuities: Why Your “Safe” Retirement Account Might Be Losing Money

Think your annuity is conservative? Learn how high fees and underperformance may be eroding your savings—and how to protect your income for retirement.

6/6/20252 min read

a room that has a bunch of drawers in it
a room that has a bunch of drawers in it

Is Your “Conservative” Account Quietly Losing Money? Susan’s Story Might Sound Familiar

Many people approaching retirement believe they’ve made a safe move by placing a portion of their nest egg into an annuity.

But what if that account—meant to protect and grow your money—is actually underperforming… or worse, losing value?

This isn’t just a what-if. It’s exactly what happened to Susan.

“I Thought It Was Safe… So Why Is It Losing Money?”

Susan came to us with a concern: one of her retirement accounts—meant to be conservative—was steadily underperforming. After years in the workforce and careful financial planning, she expected better.

When we reviewed her statement, the answer was clear: Susan had a variable annuity.

Like many others, she assumed that “annuity” meant guaranteed protection. But not all annuities are built the same.

What Susan Didn’t Know (And You Might Not Either)

Susan said, “Yes, it’s an annuity. But why is it losing money?”

That question opened the door to a larger conversation—one that every variable annuity owner deserves to have.

We explained that variable annuities are tied to market-based investment funds, which means they fluctuate. They can grow, but they can also lose value.

And in Susan’s case? After 10 years, her account had earned just 0.51% total return.

Yes, you read that right—half a percent over a decade.

Susan was shocked. “How is that possible if the market has soared the past 10 years?”

The reason?

  • Her contract’s sub-accounts underperformed

  • The high internal fees dragged down growth

  • The annuity didn’t track the market directly—just selected funds

  • All the risk, but very little reward

She Was Sold a Promise, But Delivered a Puzzle

Susan’s original goal was smart: to put some of her retirement savings into an account that could grow with the market and eventually provide guaranteed income.

But her contract never delivered. Not because she made a mistake—she followed advice. But the product didn’t live up to her purpose.

We reviewed her income rider—still unused after 10 years—and asked her: “What was your original reason for choosing this type of annuity?”

Her answer?
“I wanted guaranteed income, and I was told this could grow with the market. I thought I’d have more by now.”

There’s a Better Way Forward

Susan had three choices:

  1. Keep the annuity and hope the funds improve

  2. Activate the income rider and lock in low income

  3. Transfer to a different type of account—one that protected her principal, reduced fees, and still offered income growth

She chose #3. And she isn’t alone.

We helped her:
Preserve her original goal: guaranteed income
Reduce hidden fees
Remove market downside risk
Earn consistent growth (2–6%) with less stress

Could You Be in the Same Boat as Susan?

If you own an annuity—especially a variable annuity—it’s time to ask:

  • Do I know what kind of annuity I actually have?

  • Has it kept pace with the market—or is it quietly dragging behind?

  • Am I paying more in fees than I realize?

  • Is there a better option that can protect my income and grow it?

Don’t wait 10 years to find out your “safe” account isn’t so safe.

You Deserve to Know Exactly What You Own—and What It’s Costing You

We offer a free annuity review to show you:

  • What type of contract you have

  • How it’s performed compared to alternatives

  • What income you could receive now and in the future

  • Whether switching might benefit you


Know the facts. Protect your future. Make your income work harder.