Does it make sense to buy a variable annuity inside a tax-deferred plan like an IRA?
First, the tax-shelter benefit is made completely irrelevant if the annuity is held in an IRA or other retirement account. The IRA or retirement plan already provides for the tax deferral and, in fact, distributions are governed by the provisions of Section 72 applicable to IRA retirement plans, not the general annuity provisions. We would go so far as to tell anyone who has someone trying to sell them one of these products in a retirement plan based on the tax benefits to run as quickly as possible away from that sales person. He or she is either misinformed or dishonest. Also keep in mind that annuities may be the only form of investments an insurance agent can solicit. Second, the beneficiary designation is a non-issue for annuities in a retirement account. IRAs and most other qualified retirement plans already provide for beneficiary designations outside of probate. What are the alternatives for steady income in my retirement? We recommend purchasing a laddered portfolio of insured
