Roth 401K versus variable annuity

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date Roth 401K versus variable annuity rick++ 01-11-2007  Re: Roth 401K versus variable annuity joetaxpayer 01-11-2007
Posted by rick++ on January 11, 2007, 9:24 am I was noticing the similiarities of a Roth 401K to a VA. Are these items accurate: Both are funded with post-tax dollars; earnings are deferred. Both have have 10% tax penalty if withdrawals before five years. A Roth has no mandatory age withdrawal. A VA matures at some future contract date which can be age 90 (or later?). Roth contributions have an AGI limitation and ceiling amount. A VA has no AGI limitation or ceiling amount. A VA has an insurance wrapper overhead of at least 0.25%. It may have early withdrawal penalties beyond the federal one, but some dont. A Roth can be inherited wihout paying immediate taxes. The gains in a VA are taxes when inherited. The insurance part of a VA can be structured for additional benefits such guaranteeing principal, death benefit etc, but that may increase the insurance amount. Posted by joetaxpayer on January 11, 2007, 10:07 am rick++ wrote: > I was noticing the similiarities of a Roth 401K to a VA. > Are these items accurate: > > Both are funded with post-tax dollars; earnings are deferred. > Both have have 10% tax penalty if withdrawals before five years. > A Roth has no mandatory age withdrawal. A VA matures at some > future contract date which can be age 90 (or later?). > Roth contributions have an AGI limitation and ceiling amount. > A VA has no AGI limitation or ceiling amount. > A VA has an insurance wrapper overhead of at least 0.25%. > It may have early withdrawal penalties beyond the federal one, > but some dont. > A Roth can be inherited wihout paying immediate taxes. > The gains in a VA are taxes when inherited. > The insurance part of a VA can be structured for additional > benefits such guaranteeing principal, death benefit etc, > but that may increase the insurance amount. > The best part of the VA you missed is that all gains are then taxed at ordinary rates upon withdrawal. So even after the years of "only" .25% overhead, you get to support uncle sam on the back end. JOE Similar Threads Posted variable annuity inside 401k December 19, 2006, 5:31 am Variable Annuity Questions March 5, 2007, 4:51 pm Put 401K into an Annuity? November 21, 2006, 9:53 am Roth 401K? January 2, 2007, 5:04 am Roth 401k vs. Roth IRA vs. 401k January 8, 2007, 5:00 am Roth vs Traditional 401k July 10, 2007, 4:48 pm Thoughts on Roth 401k January 15, 2008, 6:56 pm 401k After Tax accumulations to Roth IRA October 18, 2008, 10:20 am Had to move 401K to IRA. Can I now make it Roth IRA? February 8, 2007, 4:33 pm Roth 401k and a possible dead horse. August 14, 2007, 11:16 pm