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Subject:  Re: Where to save for retirement? Date:  4/27/2004  9:30 AM
Author:  2old4bs Number:  40707 of 90719

I also forgot to add that you might want to consider an annuity. There are some relatively cheap ones--I believe Vanguard and TIAA-CREF offer ones that are not too expensive. In an annuity the contributions are not tax deductible, but the money does grow tax-free. When you begin withdrawals, you are taxed on a percentage basis of contributions/profits (you're not double-taxed on your contributions IOW).

Keep in mind that your investment choices are limited in an annuity, and you are charged an extra annual fee that you wouldn't be charged in a taxable account. Please do a thorough investigation of what annuities are and how they work before investing. For many investors they are not suitable, but in a few cases, like those with high incomes who are saving/want to save a lot they can offer a way for the dollars to grow tax-free. I have one because, like you, I'm not eligible for a Roth, I've already maxed out my 401K and non-deductible TIRA, plus I save a substantial amount into a taxable account. I also consider it a way to gain more tax-conscious withdrawal flexibility during retirement.

It's another thing to consider. You might want to read this thread:


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