| BUSINESSWEEK ONLINE : SEPTEMBER 20, 1999 ISSUE | ||||||||
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| BUSINESSWEEK INVESTOR
Is an Annuity Right for You? Have you maxed out your 401(k), IRA, and other retirement options? The accounts give you the same tax deferral as a variable annuity, at lower cost. Can you go for 15 years without tapping the funds? With higher fees and no tax break on capital gains, annuities can take that long to match mutual funds' aftertax return. Will you need the funds before you turn 59 1/2? Annuities carry a 10% tax penalty on earnings withdrawn before then. Can you afford to spread annuity payouts over many years? Collecting annuity earnings as a lump sum can push you into a higher tax bracket. Are you likely to spend your annuity before you die? Annuities in an estate face income and estate taxes, and don't enjoy the stepped-up basis that wipes out capital-gains taxes on most inherited assets. DATA: FIDELITY INVESTMENTS, BUSINESS WEEK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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