I would discourage the use of an annuity inside of a qualified plan. A SEP is already tax deferred, so why use a vehicle inside of a tax deferred vehicle that is designed to afford tax deferral outside of a qualified plan...?
Another way of saying this is, any other investment vehicle will accumulate tax deferred inside of the SEP without having to pay the extra internal cost associated with the annuity for tax deferral.
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And just what internal cost does a fixed annuity have for the purpose of tax defferal? Just to answer my own question it is none. The use of an annuity as a funding vehicle for any type of IRA should be more dependent on what the client is trying to accomplish in regards to thief risk tolerance.
To the OP Great American/Annuity Investors might be a good fit if your starting from zero... I like American National but they do not do SEPs. Which brings up the question of looking at 401Ks you add a small admin cost but pick up other features such as the ability to use loans that SEPs don't offer.
I think we all want to avoid a thief.
I'm sure you meant "their". And you make a good point about a persons risk tolerance. I have some clients who wouldn't touch the market with your money, let alone theirs. I'm sure SportsNut was just thinking along the lines of a VA which do have some internal costs which mutual funds don't have. With that said, it's not often that you find a self-employed person who is risk averse. At least not in the early stages of life.
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I think we all want to avoid a thief.
I'm sure you meant "their". And you make a good point about a persons risk tolerance. I have some clients who wouldn't touch the market with your money, let alone theirs. I'm sure SportsNut was just thinking along the lines of a VA which do have some internal costs which mutual funds don't have. With that said, it's not often that you find a self-employed person who is risk averse. At least not in the early stages of life.
Good catch... Dam phone and auto correct anyone know how to turn it off?
Well maybe you are able to read between the lines better than I but I reviewed the op and it doesn't mention the word FIXED annuity anywhere. You ass-u-me'd that this is what the op was referring to and frankly most folks aren't looking for FIXED annuity as their (of theif) first choice.
As you pointed out Am Nat'l doesn't do SEP's, so the annuity model doesn't fit evey type of plan, whereas there are many more investments that will fit within an SEP, as you know.
Obviously the OP needs a bit more education on the subject since it appears that he is looking for a product known as an "SEP annuity". I wonder where he/she heard that one from...? Joe Agent, who just got licensed and read about annuities and his co just happens to sell em', and the OP has read about an SEP... well you get my point.
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So then you are receding to a VA. Yes a VA has internal cost, BUT none of those costs related to adding tax deferal.
I agree there are other vehicles that can fund an IRA or for that matter any qualified plan as all these plans are are tax rules.
