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Old 01-30-2009, 04:56 PM   #21
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Originally Posted by jrobb45 View Post
I pretty much feel the same as you about annuities. Even though a very good friend, who is a retired insurance agent, and one of my son in laws who is currently an insurance agent say annuities are good(in the right situation), except for the fees.
The "right situation" is the key here. High income, high net worth, maxed out qualified retirement plans, want more tax deferral, (in some states) want more asset protection from creditors and lawsuits... an annuity may be the ticket. The *right* kind of annuity for the right person can make sense. Not one with massive fees.

And there are many fixed annuities today which have no fees.

But these are almost never aggressively peddled because there are no salescritters to make a few thousand bucks off of the sale.

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 01-30-2009, 08:54 PM   #22
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I really question the value of tax deferral, especially moving forward from now. I don't think most people end up in a significantly lower tax bracket upon retirement, and I especially doubt it in the near future. If tax rates go up you would very likely be in a higher bracket with less spending power. I'm not saying there's no need for pre-tax savings. It's a great place to put tax inefficient investments. But I think you tend to have more of the agility to minimize taxes in retirement working mostly from after-tax savings/investments. I would never knowingly put money in an annuity just to avoid current taxes. Of course, JMHO.

And, of course, a Roth with tax avoidance is the best of both worlds.

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