rick++ wrote:

- quote -

Would you mind expanding on this reply? 5 figures is $10,000+ in tax you
deffered. Can you give a hint as to what the rest of the story is? This
the low-fee annuity we've discuss here, Fidelity or Vanguard?
To me this implies $200K or more in the annuity. Any concern about the
taxation at the other end?
JOE

"thamsenman" <KRamanujam[at]gmail.com> wrote
- quote -

It is the deferred variable annuity that the pundits so
thoroughly reject. I have looked at commentary on annuities
by Scott Burns, Clark Howard, and others, and I think the
best treatment (for its completeness and approachability) I
have seen so far is at Suze Orman's site at
http://www.suzeorman.com/igsbase/igs...xpertiseID=107 .

At this site she rejects annuities in most cases, but she
does not come off as rabid. Instead she treats the topic
critically and covers a lot of ground and scenarios,
including discussing when an annuity is a good idea.

I did, and defered a boatload of taxes (five figures) this year.
Its not my major savings vehicle, just one them to help
control taxes. 401Ks and IRAs have too low ceilings.

thamsenman wrote:

- quote -

The high expense ones have a(n overpriced) death benefit and trade a
chunk of potential return for a floor/ protection on the downside.

The .25% low fee VAs avoid annual current taxation, but are taxed as
ordinary income on the withdrawal side.

I do understand there is some asset protection advantage but haven't
ever been told the exact nature of it. It may protect against a lawsuit,
but again, I've seen this posted with no back-up.
JOE

"thamsenman" <KRamanujam[at]gmail.com> wrote in message
news:1165280239.783113.239760[at]n67g2000cwd.googlegroups.com...
- quote -

Someone who has maxed out all available tax qualified plans available to
them (IRAs, 401(k)s, etc), needs additional tax deferral, does not need to
touch the money until they are 59 1/2, if over 59 1/2 do not need the money
for at least 5-20 years.

Many variable annuities have an income rider available and this could be
beneficial if you have included the annuity in your plan for future income
needs. An annuity is basically the vehicle needed to create your own
pension. Let's say you are 55 and plan on retiring at 65. You want a
guaranteed income stream at retirement. Most income riders are based on a
look-back period. Typically the rider will guarantee a fixed amount of
growth (5%-7%) no matter what the underlying investments have done. So at 55
you drop $$$ into a variable annuity, you hold it ten years, you are now
ready to retire and start your income stream, the amount of annual income
you receive will be based on the value of the annuity. If the underlying
investments have performed well your income will be based on the current
value. If they have not done as well as what the income rider guarantees
then the value calculated by the rider will be used. You annuitize the
annuity and you now have your lifetime income stream or self made pension.
These riders usually call for a 10 year minimum annuitazation period. So to
benefit from the rider you must keep the annuity full term (typically 10
years) and annuitize for a minimum of 10 years, a twenty year deal !

Only a portion of your retirement savings would be allocated to this sort of
income plan. While guaranteed income for life is nice, it does not typically
adjust for inflation. You would still need additional investments to
generate income, have for reserves, etc.

Hey everybody,

I know a lot of TV pundits (including Suze Orman) and some online
financial commentators rail against variable annuities. They point to
the high fees, etc. and claim that it would be better to just buy
stocks/funds on your own. People seem to love slamming insurance
companies (can't blame them all the time for it). Usually, I view all
investments as appropriate in some sort of scenario/time/situation and
I was wondering when is it a good idea to actually go after and buy a
variable annuity (say with rock bottom fees like Vanguard, etc.)? Who
would be the ideal investor investing in a variable annuity and what
would they look for? How would purchasing a variable annuity optimally
help them find what they are looking for.

Any input is appreciated,

thanks