"K Oke" <kedaroke[at]yahoo.com> wrote in message
news:de55a141.0311160906.27d24af6[at]posting.google.com...
- quote -

One can only have an individual 401k if they are self-employed or own a
business. The same goes for most employer sponsored retirement plans.

For tax deferral:

1. Annuities - variable, fixed, indexed
2. Life insurance - in particular, overfunded versions. If you own life
insurance already, or need/want to purchase some, an overfunded life
insurance policy can kill two birds with one stone. And, as Ben Baldwin
points out, eventually (2-3 years) you will be paying for your personally
owned life insurance with before tax dollars - something you normally cannot
do. A single premium life policy that violates the Modified Endowment
Contract (MEC) limits is taxed the same way as an IRA prior to age 59.5, so
if one is happy with the taxes on IRA/QPs, then a contractually max funded
life policy (the maximum allowed by the company, NOT the IRS) is an
alternative worthy of consideration. The Internal Rate of Return (IRR) on
cash values is the highest it can be (before-tax) when compared to any other
life policy, all things being equal. The caveat is that if you're in a top
tax bracket, a non-MEC policy may provide better after-tax IRR, but then you
have to keep the policy inforce forever. You can take a plain vanilla single
premium whole life policy and annuitize it for retirement income when you're
over age 59.5 and not only pay taxes on the gain, you get to spread these
taxes out over many years. Plus, you get an income that cannot be outlived.

An interesting finding: Five Year Index Annuity Returns Beat Alternatives
(as of September 2003)

http://www.indexannuity.org/index_co...um.htm#respect

There are some who point to tax-managed funds, or index funds, as partially
sheltered. This is a gamble over the long term, since the only constant with
the tax law is CHANGE. No analysis beyond next year proves a single thing
when it comes to tax efficiency. On the other hand, the deferral of both
life insurance and annuity have remained constant for a long, LONG time. If
the LAP tax passes, all bets are off, and you'll see annuities outselling
index funds by factors greater than one (or two, or three, etc.).

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

My employer recently closed our 401K contributions because of
financial difficulties.

I would like to know on options that I have to make tax deferred
retirement contributions in addition to IRA's. Is there a way I can
maintain an individual 401K account?

Just trying to get a handle on my options here.

Thanks

K Oke.