Annuity

[firehawkocean]

Hello all,

With the new tax changes coming, I am considering whether I SHOULD open up that Jefferson National Flat rate annuity that I had mentioned in this thread about a year ago:

http://www.savingadvice.com/forums/investing-banking/62843-assistance-garret-recommendation.html

[MakeAStash]

Paying a big fee to lock in the current low interest rates does not sound appealing to me.

[disneysteve]

Hello all,

With the new tax changes coming, I am considering whether I SHOULD open up that Jefferson National Flat rate annuity that I had mentioned in this thread about a year ago:

http://www.savingadvice.com/forums/i...mendation.html

I don't see any reason why the advice would change. Stay away from annuities. Stay away from advisers who are more concerned with their own best interests than with yours.

[firehawkocean]

The annuity is still not recommended, even if my tax rate goes way up (if Obama has his say)?

[Like2Plan]

The annuity is still not recommended, even if my tax rate goes way up (if Obama has his say)?

Firehawkocean,

Is this what your concern is?

Today, capital gains and dividends are taxed at a maximum rate of 15%. Without intervention by Congress, the top rate on capital gains will rise to 20%, while dividends will be taxed at the same rate as ordinary income. Also, due to a provision of the Affordable Care Act that takes effect Jan. 1, taxpayers with income exceeding $200,000 ($250,000 for married couples filing jointly) would pay even higher effective rates, with a new 3.8% Medicare tax on certain net investment income stacked on top of the higher income tax.
It is my understanding that income derived from retirement accounts is excluded from this additional tax, but I do not totally understand how this will work.

I really don't know much about annuities, either, other then they don't seem like a very good deal with the interest rates being so low. Maybe you could you explain what benefit you would receive from investing in an annuity that would outweigh such low returns?

[Mr Nice Guy]

A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.

Why did you post a definition of an annuity?