I have been discussing finincial plans with and advisor. One of the things he has suggested is using an annuity for my rollover IRA. I have read through the thoughts on annuities from Fool and some of the comments on the boards, however, I am still not convinced either way. I am 32 and the IRA is a rollover from a previous 401K at about 45K. The annuity that was recommended has a total expense of 2% (including ME and account fees), no front load but a 7 year surrender charge. The investments are UIT's that follwing either specific sectors (tech, healthcare etc) or UIT's that follow a defined strategy (lowest price highest yeild 5 from the DJIA, similar one for Heng Seng, and london market, S&P midcap with similar paraemters etc). Most of the knocks about annuities that I have seen have been high fees, forced long term and that the payouts are treated as regular income as opposed to capital gains income. These fees are a little worse than some mutual funds but overall not as bad as some especially since there is not front load. Since the money is in an IRA I would not be able to access it until long after the surrender charge anyway. (The only down side I see fo the surrender charge is that I will not be able to move the money to another firm if I am dissatisfied) If I am correct in my understanding of IRA distributions the money from an IRA is taxed as regular income regardless of the investment vehicle so this negates the third issue against annuities.The annuity does offer a guarentee that should I be killed and the market is down from the initial investment the minimum payout is the investment amount.The company that is offering the annuity is Jackson National Life.Unless I am missing something (probably am) it doesn't seem that the annuity is that bad of a way to go. I would like a few more choices for investment but the ones offered have faired well over the last few years. Any and all comments are greatly appreciated.
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