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buzman, you wrote:

<< "When are annuities a good investment???"

1. Annuities can provide tax deferred growth, so if an annuity is the only tax deferred vehicle at your disposal then they may be indicated.
Caution: This occurs very infrequently

2. If someone wanted a stable income flow for the balance of their life. Straight life annuity. Of course, good is relative. Because there is NOTHING for heirs.

"Why is it not better to simply purchase stocks/stock funds rather than annuities??? Of course, the last few years have been rather dismal for stock funds. Annuities are generally better sold than bought.

And the there is the tax effect -- with annuities there is no tax on the dividend portion of the return which is great but easily managed by avoiding dividends in non tax deferred investments during the accumulation phase,"

This is incorrect. Annuities allow for tax deferred growth. There is no tax on the return of principal. Also, it is counter intuitive to "avoid dividends in non tax deferred investments during the accumulation phase" since there is no tax consequence during accumulation phase.

buzman-This stuff is so neat.

You've listed only two very general reasons and I would tend to agree. However there may be many other more specific reasons as it applies to anyone's particular set of issues. For example, certain immediate annuities can be very useful for many seniors in Medicaid planning. Right??? ;-)
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