I've known the IRA and 401K plans as traditional retirement investment vehicles. Recently I've been told that an annuity could be a better option. I'm a bit confused!
Total Comments: 10
Posted: Thu Jan 21, 2010 03:02 pm Post Subject:
The annuity is an investment with certain tax features similar to a non deductible IRA. IRAs and 401k are accounts not investments (i.e. you could fund an IRA with an annuity).
Generally speaking contributing to a 401k to the match level is an ok idea. After the match contribution level, it becomes wise to look elsewhere to save money. Fees inside 401ks can be high, and you'd often make out better placing the money in an IRA or annuity. If there is no match, or you are the business owner so the match provision would be like taking money out of one pocket and placing it in another, you're probably better off skipping the 401k. Like always there is no hard and fast rule, and each situation is unique, keep this in mind.
Roth IRAs are nice savings vehicles, but like all IRAs are limited quite a bit in the amount that you can put in them every year.
Back to your original question: is the annuity better? There's no definitive answer that can be given based on the very limited amount of information we have. There are a lot more facts that would need to be collected before one could suggest one or the other for you.
Posted: Thu Jan 21, 2010 03:29 pm Post Subject:
This is a hard question to answer because you are asking it as an either/or question. The fact is that your IRA could be an annuity.
The best way that I can answer this is to simply say that a non-qualified annuity should never be used INSTEAD of making a deductible 401(k) or a deductible IRA or a Roth IRA contribution.
I'm not a fan of using the word "Never". If there is an exception to what I'm saying, I'd appreciate if someone can point it out to me.
Posted: Fri Jan 22, 2010 04:14 am Post Subject:
The best way that I can answer this is to simply say that a non-qualified annuity should never be used INSTEAD of making a deductible 401(k) or a deductible IRA or a Roth IRA contribution.
I'm not a fan of using the word "Never". If there is an exception to what I'm saying, I'd appreciate if someone can point it out to me.
What if I don't want the deduction but I've already made a contribution to a Roth or make too much money? Most of use would answer life insurance since it's FIFO and much more accessible. I know some who might not :roll:
What if I've contributed to an IRA to the max and the 401k has no match and really bad investment options?
Using the non Q annuity has certain flexibility options if you decide you want earlier access to the money but don't plan on leaving your employer. You can 72q the annuity prior to 59.5 to get at money.
Still if your primary goal is accumulation I think IRA, 401k, and/or overfunded life insurance works better than Non Q annuity.
Posted: Fri Jan 22, 2010 09:13 am Post Subject:
Yes, an annuity could also offer great retirement benefits like the 401K or IRA plans.
An annuity - be it a variable one or a fixed one does offer retirement benefits some of which are similar to those offered by the above plans.
On the other hand, we should also remember that the retirement benefits offered by the annuities aren't dependent on any earning limitations,specified withdrawals or contribution levels. It's true that a person's after-tax income is put towards contributions but his retirement income grows free of taxation.
Posted: Fri Jan 22, 2010 02:31 pm Post Subject:
What if I don't want the deduction but I've already made a contribution to a Roth or make too much money? Most of use would answer life insurance since it's FIFO and much more accessible. I know some who might not Rolling Eye
s
It would take an awfully strange fact pattern for someone not to want the deduction. I guess that it could happen.
What if I've contributed to an IRA to the max and the 401k has no match and really bad investment options?
Again, I guess that this is possible, but once again it would take a really strange fact pattern to give up the deduction on the contribution.
Let me say that I have been in business for 20 years, and I can't ever recall seeing a situation in which a NQ annuity would make more sense than a person's 401(k) or a deductible IRA or Roth IRA.
I must admit that in general I don't like NQ deferred variable annuities because of their lack of a step up in basis at death and all gains being treated as income and LIFO treatment.
Posted: Fri Jan 22, 2010 09:57 pm Post Subject:
Agreed for the most part, an attempt at playing devil's advocate.
Posted: Fri Jan 22, 2010 10:20 pm Post Subject:
Devil's adocate is a great way to learn and to strengthen one's own beliefs.
Posted: Sun Jan 24, 2010 03:50 am Post Subject:
Let me say that I have been in business for 20 years, and I can't ever recall seeing a situation in which a NQ annuity would make more sense than a person's 401(k) or a deductible IRA or Roth IRA.
Absolutely correct. Most insurers now employ "suitability" questionnaires in NQ annuity sales (especially VAs) to find out if the purchaser has (or intends to) fully funded ALL of their available TQ options. As much as they might like the cash flow, some will actually decline the business if the answer is "no."
Part of the confusion also stems from the familiar use of the word "investment". No form of life insurance or annuity is supposed to be marketed as "an investment" (securities laws specifically forbid this, although it's violated by RRs every day of the week).
The closest they actually come to being an investment is dialogue that should sound more like, "This is a life insurance/annuity policy. It has a savings component that allows you to direct money into the insurance company's separate account and subaccounts that work essentially like mutual funds."
All of the "tax advantages" are due solely to the fact that the vehicle is insurance. If it were an investment, it would not have those same advantages. The fact that the rules that apply to retirement plans and annuities are nearly identical is merely recognition that they are intended to serve similar purposes, and to give one (the NQ annuity) an advantage over the other (qualified retirement plan) would upset the wheels of government and taxation (FIFO vs LIFO). '
I am not a big fan of agents who market life insurance (especially UL and VUL) as a mechanism for accumulating funds for retirement at the expense of legitimate retirement plans. A UL/VUL policy that is improperly funded can collapse more easily than a mutual fund. Then what?
Posted: Sun Jan 24, 2010 12:44 pm Post Subject:
Part of the confusion also stems from the familiar use of the word "investment". No form of life insurance or annuity is supposed to be marketed as "an investment" (securities laws specifically forbid this, although it's violated by RRs every day of the week).
"Investment" can't be used in conjunction with non-variable life/fixed annuities. "Investment" can certainly be used in conjunction with variable products. Why must one be registered to sell these products? Why must they be sold via prospectus? Why must one have a series 6 or 7 along with their insurance license? Because they are securities.
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obsessive Disorder OCD Symptoms
the precise content of obsessions and compulsions varies between individuals. notwithstanding, Performing compulsive acts are often not effective and fail to neutralize the obsessions; as being a, this can lead to the exacerbation of such thoughts and to ultimately, Greater soreness. Compulsions are not done for exhilaration, Although some experience temporary relief from their anxiety.
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indications of OCDObsessive compulsive disorder (ocd) Is seen as an having either obsessions or compulsions (Though most individuals with the disorder have both) That are time-consuming. Insight can vary within an individual over the illness. Poorer insight has been linked to worse long term future outcome. (2019). excessive compulsive disorder (obsessive-compulsive disorder) implications. Psych single.
Posted: Thu Jan 21, 2010 03:02 pm Post Subject:
The annuity is an investment with certain tax features similar to a non deductible IRA. IRAs and 401k are accounts not investments (i.e. you could fund an IRA with an annuity).
Generally speaking contributing to a 401k to the match level is an ok idea. After the match contribution level, it becomes wise to look elsewhere to save money. Fees inside 401ks can be high, and you'd often make out better placing the money in an IRA or annuity. If there is no match, or you are the business owner so the match provision would be like taking money out of one pocket and placing it in another, you're probably better off skipping the 401k. Like always there is no hard and fast rule, and each situation is unique, keep this in mind.
Roth IRAs are nice savings vehicles, but like all IRAs are limited quite a bit in the amount that you can put in them every year.
Back to your original question: is the annuity better? There's no definitive answer that can be given based on the very limited amount of information we have. There are a lot more facts that would need to be collected before one could suggest one or the other for you.
Posted: Thu Jan 21, 2010 03:29 pm Post Subject:
This is a hard question to answer because you are asking it as an either/or question. The fact is that your IRA could be an annuity.
The best way that I can answer this is to simply say that a non-qualified annuity should never be used INSTEAD of making a deductible 401(k) or a deductible IRA or a Roth IRA contribution.
I'm not a fan of using the word "Never". If there is an exception to what I'm saying, I'd appreciate if someone can point it out to me.
Posted: Fri Jan 22, 2010 04:14 am Post Subject:
The best way that I can answer this is to simply say that a non-qualified annuity should never be used INSTEAD of making a deductible 401(k) or a deductible IRA or a Roth IRA contribution.
I'm not a fan of using the word "Never". If there is an exception to what I'm saying, I'd appreciate if someone can point it out to me.
What if I don't want the deduction but I've already made a contribution to a Roth or make too much money? Most of use would answer life insurance since it's FIFO and much more accessible. I know some who might not :roll:
What if I've contributed to an IRA to the max and the 401k has no match and really bad investment options?
Using the non Q annuity has certain flexibility options if you decide you want earlier access to the money but don't plan on leaving your employer. You can 72q the annuity prior to 59.5 to get at money.
Still if your primary goal is accumulation I think IRA, 401k, and/or overfunded life insurance works better than Non Q annuity.
Posted: Fri Jan 22, 2010 09:13 am Post Subject:
Yes, an annuity could also offer great retirement benefits like the 401K or IRA plans.
An annuity - be it a variable one or a fixed one does offer retirement benefits some of which are similar to those offered by the above plans.
On the other hand, we should also remember that the retirement benefits offered by the annuities aren't dependent on any earning limitations,specified withdrawals or contribution levels. It's true that a person's after-tax income is put towards contributions but his retirement income grows free of taxation.
Posted: Fri Jan 22, 2010 02:31 pm Post Subject:
What if I don't want the deduction but I've already made a contribution to a Roth or make too much money? Most of use would answer life insurance since it's FIFO and much more accessible. I know some who might not Rolling Eye
sIt would take an awfully strange fact pattern for someone not to want the deduction. I guess that it could happen.
What if I've contributed to an IRA to the max and the 401k has no match and really bad investment options?
Again, I guess that this is possible, but once again it would take a really strange fact pattern to give up the deduction on the contribution.
Let me say that I have been in business for 20 years, and I can't ever recall seeing a situation in which a NQ annuity would make more sense than a person's 401(k) or a deductible IRA or Roth IRA.
I must admit that in general I don't like NQ deferred variable annuities because of their lack of a step up in basis at death and all gains being treated as income and LIFO treatment.
Posted: Fri Jan 22, 2010 09:57 pm Post Subject:
Agreed for the most part, an attempt at playing devil's advocate.
Posted: Fri Jan 22, 2010 10:20 pm Post Subject:
Devil's adocate is a great way to learn and to strengthen one's own beliefs.
Posted: Sun Jan 24, 2010 03:50 am Post Subject:
Let me say that I have been in business for 20 years, and I can't ever recall seeing a situation in which a NQ annuity would make more sense than a person's 401(k) or a deductible IRA or Roth IRA.
Absolutely correct. Most insurers now employ "suitability" questionnaires in NQ annuity sales (especially VAs) to find out if the purchaser has (or intends to) fully funded ALL of their available TQ options. As much as they might like the cash flow, some will actually decline the business if the answer is "no."
Part of the confusion also stems from the familiar use of the word "investment". No form of life insurance or annuity is supposed to be marketed as "an investment" (securities laws specifically forbid this, although it's violated by RRs every day of the week).
The closest they actually come to being an investment is dialogue that should sound more like, "This is a life insurance/annuity policy. It has a savings component that allows you to direct money into the insurance company's separate account and subaccounts that work essentially like mutual funds."
All of the "tax advantages" are due solely to the fact that the vehicle is insurance. If it were an investment, it would not have those same advantages. The fact that the rules that apply to retirement plans and annuities are nearly identical is merely recognition that they are intended to serve similar purposes, and to give one (the NQ annuity) an advantage over the other (qualified retirement plan) would upset the wheels of government and taxation (FIFO vs LIFO). '
I am not a big fan of agents who market life insurance (especially UL and VUL) as a mechanism for accumulating funds for retirement at the expense of legitimate retirement plans. A UL/VUL policy that is improperly funded can collapse more easily than a mutual fund. Then what?
Posted: Sun Jan 24, 2010 12:44 pm Post Subject:
Part of the confusion also stems from the familiar use of the word "investment". No form of life insurance or annuity is supposed to be marketed as "an investment" (securities laws specifically forbid this, although it's violated by RRs every day of the week).
"Investment" can't be used in conjunction with non-variable life/fixed annuities. "Investment" can certainly be used in conjunction with variable products. Why must one be registered to sell these products? Why must they be sold via prospectus? Why must one have a series 6 or 7 along with their insurance license? Because they are securities.
Posted: Mon Jul 01, 2019 05:51 am Post Subject: russian sexy girls
obsessive Disorder OCD Symptoms
the precise content of obsessions and compulsions varies between individuals. notwithstanding, Performing compulsive acts are often not effective and fail to neutralize the obsessions; as being a, this can lead to the exacerbation of such thoughts and to ultimately, Greater soreness. Compulsions are not done for exhilaration, Although some experience temporary relief from their anxiety.
you are able to, Many individuals with obsessive compulsive disorder (ocd) Have dysfunctional ideas. Despite russian girls the fact that these beliefs may appear like person's general personality, The key dependence on meeting for OCD is that the obsessions in OCD are not perceived as pleasurable or experienced as voluntary. In fact a hallmark symptom of obsessions is that they can be intrusive and unwanted.
indications of OCDObsessive compulsive disorder (ocd) Is seen as an having either obsessions or compulsions (Though most individuals with the disorder have both) That are time-consuming. Insight can vary within an individual over the illness. Poorer insight has been linked to worse long term future outcome. (2019). excessive compulsive disorder (obsessive-compulsive disorder) implications. Psych single.
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