UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76075  
Subject: Re: Tax Advantages beyond IRAs? Date: 1/15/2004 10:42 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
With very few exceptions, annuities are a bad idea.
You can put after-tax money into growth stocks that don't pay dividends and simply buy and hold. No tax consequences until you sell, and that can be decades away.
Once you reach retirement age, a problem with the large IRA is getting the money out. If you put before-tax money in, then Uncle Sam wants his due--and your required distributions can amount to lots of tax. You probably don't have a huge income now, so paying the tax now is probably at a better rate than you'll be paying, say 20 years from now.
If you REALLY want an annuity, look at Vanguard and TIAA-CREF, but you are really better off with just buy and hold. You can even give appreciated shares to your favorite charity and avoid the tax on the appreciation.
Yes, contribute the maximum to your and your wife's IRA and your child's ESA, but then you really do better to just pay your taxes, focusing on whether you are making an investment that will earn you money rather than on whether you'll owe some tax on April 15.
Best wishes, Chris
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

The Deflationary Cycle Explained
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement