No. of Recommendations: 1
Let's forget for a moment that we originally started this thread discussing an annuity inside of an IRA (which is unforgivable on the part of the financial advisor); and let's look toward a more fundamental issue; should one ever by a deferred variable annuity?

Several studies where done (of course, not a one can I put my hands on) that compared a VA with some alternatives:

1. Purchase of the same amount of term life insurance and investing the balance in a regular taxable account investing in indicies: either an index mutual fund or the tradeable index itself; e.g. DIAs, SPRs, QQQs, etc.

2. Same as (1) above ecept the extra investment went into the same mutual funds as offerred by the insurance company; albeit, typically a different class than offerred inside the annuity.

IN EVERY CASE, (1) and/or (2) beat the VA by varying but very wide margins. The only possible explanation is that VAs are loaded up with outrageous fees that hurt the consumer.

I come to the conclusion that, but for the rare circumstance that I can not envision, NO ONE should ever purchase a VA.


(Conversely, in certain markets, and at certain ages, I have a reverse opinion on immediate annuities).
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