I probably have said this before either here or somewhere else; The reason why I can be aggressive with my trading is because I have some of the newer annuities that have the "guaranteed income withdrawal" (or similar) where the income account (the account that the annuity is calculated) grows either at 5% (newer plans are lower and older plans of the early 2000's higher)
If the actual account (the real money account) falls or fails to achieve 5% growth. IOW If you start at $10000 in the actual account and income account, and the actual account that has your selected mutual funds, falls by 10%, the actual account will be worth $9000 and but the income account will be worth $10500. The death proceeds would be $10,000.
The second year is just as bad, for another 10% loss. The Account value is thus $8100. The Income becomes 5%more, to $11025. The death proceeds is $10000.
So, what happens when the market takes off? The 3rd year, your selected mutual funds increases 25%. Your Actual fund is now $10125. The Income account is $11576. The death proceeds is $10125.
The fourth year is another banner for +25%. The Actual account is $12656. The Income account becomes 12656. The death proceeds is 12656.
Disclaimers: See your adviser(s) I have found that not all annuities are the same even when offered by the same adviser firm or by the same insurance-annuity company. You need to thoroughly understand the product, advantages and disadvantages.
The replies are not factually wrong but are misleading, incomplete, and does not account for client's risk profile or for financial goals. Based on the brief description of OP's needs for way's to reduce AMT, deferred annuity (fixed or variable) is a viable option going forward. There are some important features in an annuity that you can not get in a mutual fund, indexed funds, stocks, CD's or bonds whether they be inside or outside tax qualified accounts.
The OP and replies would do well to thoroughly familiarize themselves with the pro's before they start with the cons. OP should hear the presentation for annuities many times and if necessary from different advisors to understand the pros and cons.
Disclaimer: We have annuities in and out of tax qualified plans. Approx 50% of retirement assets are in annuities and will slightly vary based on my stock trading acumen and the performance of the annuities. My trading in 2013 was up 26%. The variable annuities were up 29% after fees.
