Annuities in IRA's

Yes, this is the second time I am going to write about this topic. It warrants attention because I have seen it in the newspapers over the past several days. If you've read my opinion on this topic, please forgive me.

Butl, I have to tell you that it amazes me much stupidity surrounds the financial industry. Let me explain. I read article after article about people saying that annuities don't belong in IRA's because they are tax deferred vehicles in a tax deferred account. This is a statement that needs clarification.

Anyone who knows annuities knows that there are several benefits to owning an annuity (and some downsides too) and only one of them is the tax deferral aspect. There are safety benefits, beneficiary designation benefits, and benefits other than tax deferral. So it begs the question, 'is an annuity really a bad idea for an IRA?'

My answer is it depends. If someone is only looking for tax deferral and that is the reason he is buying the annuity, then it is obvious that it doesn't belong in an IRA. However, if someone is concerned with the other benefits of the annuity, then maybe it can go in the IRA and be a good idea.

My point is, it is not fair to make a blanket statements such as annuities don't belong in IRA's because it doesn't take into account the full picture. And if anyone knows me by know, you'll know that I am an advocate of designing the investment for the exact situation you're in. I don't believe in the investment theory that one size fits all...or the asset allocation models for that matter...who in the heck ever though of a 10 question interview that could determine where your assets should go...give me a break.

In order to determine what's right for you there are many aspects you and your financial advisor need to look at. I won't go over them because I have mentioned it before. But the bottom line is, if your situation calls for it, you can put an annuity in your IRA. It's as simple as that. Anyway, like I always say:

Ignorance is NOT Bliss.

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