Date: Tue, 24 Oct 2006 07:33:21 -0500
From: "Ed" 
Newsgroups: misc.invest.financial-plan
Subject: annuities question(s)
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On another board there was a lot posted about annuities. I posted a link to
a site that pointed out some  of
the pro's and con's.
http://registeredrep.com/annuities_ins/finance_pros_cons_annuities/

I got a reply from Elle (a regular poster here):
"The piece linked is dated 2002. Because of the tax law changes of 2003, for
one, many of its arguments are invalid."

I replied:
" Which of its arguments are invalid?"

Elle replied:
"Just about any that refer to tax law, like I wrote above."

I replied:
Ok. Points related to taxes:
1. Annuities grow tax free until withdrawal.
2. 401k & 403b plans allow pre-tax contributions.
3. 10% penalty for distributions before age 59.5.
4. Earnings will will be taxed as ordinary income.
That pretty much is all the article says that has anything to do with taxes.
Which of them are now invalid?
Elle, hasn't responded. Does anyone know if any of the 4 points above are
untrue. I took her advice and checked both Quicken and Motley Fool on the
subject and it appears that all 4 points are still valid. Does Elle know
something that I don't about taxes and annuities?

I understand that the 10% penalty can be avoided if you annuitize but
withdrawals prior to age 59.5 will be subject to a 10% penalty.