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1. Variable annuity with good aggressive fund choices, such as is available
with Sun America and with American Skandia. Principle advantage is
deferred tax growth on dollars that cannot be in an otherwise
tax-advantaged vehicle (such as IRA, 401k, SEP, etc.). Principle
disadvantage...are fees and insurance mortality expenses.

Depends on your emotions. I think hard numbers will tell you to skip the annuity, but then you have to invest your money. Maybe an index fund or two. Remember, an anuity payment(other than principal) is taxed at your regular tax rate. If you invest on your own taxes should be at a capital gain rate.

2. Direct stock purchases with these funds. Principle bogus
expenses taken out by fund managers and insurance companies. Principle
disadvantage...must pay taxes annually on dividends.

Dividends, unfortunatly, are not all that much. Could buy stocks that do not pay dividends. I think I would pick the best stock and not worry about the tax on dividends, if any.

3. Purchase undeveloped land here in Maine for future woodlot sale. Keep
it undeveloped to maintain low tax bill on the property to local town.
Principle advantage--no income or capital gains taxes until property is
sold. Principle disadvantage--property taxes must be paid annually &
lawmakers may pass legislation that wipe out the potential of the property
as a wood lot.

Don't know much about land but I would think this is a high risk option. Somebody will buy your stocks and bonds but their are very few who will but your land, espicaly if times are tough or there is a lot of land equal to yours.
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