Research Paper on:
To Buy or Not to Buy Annuities is the Question

Unformatted Sample Text from the Research Paper:
annuities. Bibliography lists 5 sources. PGannui.rtf ANNUITIES: BUY OR NOT For The PaperStore, October 2000 properly!  An annuity is a "stream of equal payments, as to a retiree, that occur at predetermined intervals (i.e., monthly or annually). The payments may continue for a fixed period  or for a contingent period, such as the recipients lifetime. Although annuities are most often associated with insurance companies and retirement programs, the payment of interest to a bondholder is  also an example of an annuity" (Scott 1988). Farrell explained a variable annuity thusly: "they are a mutual fund wrapped in a tax-deferred insurance firm account. Individuals buy variable annuities  with after-tax dollars, but earnings compound tax-deferred until retirement, when any gains are taxed as ordinary income" (2000, p. 166). Variable annuities allow the individual to invest in from  five to twenty stock or bond portfolios, called subaccounts. These are like mutual funds but with one very distinct difference: the subaccounts are sheltered from taxes until the investor withdraws  funds. The investor can also move his or her funds from one kind of a subaccount to another. But, to do so and still earn any kind of interest, the  investor must be extremely knowledgeable. Th investor must also spend a significant amount of time shopping around. There can be a remarkable difference in the expenses associated with annuity plans,  in fact, the same subaccount can be found in different annuities but with different expenses. Updegrave offers an example: if a person invests in Hayes Worldwide Growth through the  Conseco Future Reserve annuity, expenses are 2.12 percent but that same subaccount through Janus Retirement Advantage has expenses of 1.37 percent (Updegrave 91). Annuities should not be entered into quickly