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    lso be taxed as ordinary income.

    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may

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    Get ready for the battle of the new millennium, the variable annuity versus the mutual fund. Over the past few years, the variable annuity has come under extreme attack, as an investment vehicle for retirement because of its expenses and taxes laws regarding withdraws. Actually, many articles have compared the features of the fixed annuity to a mutual fund, but unfortunately; that is like comparing a wagon to a jet ski. On the other hand, the variable annuity experiences market risk and so does your mutual fund; therefore, this provides us with a fairer comparison.

    The variable annuity takes a lot of criticism, since individuals pay ordinary income taxes on withdrawn earnings. Also, the variable annuity is subject to stringent tax rules such as early withdraw penalties before age 59 1/2 with a few exceptions; even if the plan is classified as a non-qualified account. Mutual fund taxes are based on the fund manager's classification of the dividend. If the gain is considered a short-term capital gain in the mutual fund, this amount will also be taxed as ordinary income.

    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may a

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    The variable annuity takes a lot of criticism, since individuals pay ordinary income taxes on withdrawn earnings. Also, the variable annuity is subject to stringent tax rules such as early withdraw penalties before age 59 1/2 with a few exceptions; even if the plan is classified as a non-qualified account. Mutual fund taxes are based on the fund manager's classification of the dividend. If the gain is considered a short-term capital gain in the mutual fund, this amount will also be taxed as ordinary income.

    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may

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    this provides us with a fairer comparison.

    The variable annuity takes a lot of criticism, since individuals pay ordinary income taxes on withdrawn earnings. Also, the variable annuity is subject to stringent tax rules such as early withdraw penalties before age 59 1/2 with a few exceptions; even if the plan is classified as a non-qualified account. Mutual fund taxes are based on the fund manager's classification of the dividend. If the gain is considered a short-term capital gain in the mutual fund, this amount will also be taxed as ordinary income.

    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may

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    age 59 1/2 with a few exceptions; even if the plan is classified as a non-qualified account. Mutual fund taxes are based on the fund manager's classification of the dividend. If the gain is considered a short-term capital gain in the mutual fund, this amount will also be taxed as ordinary income.

    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may

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    There has been some discussion over the high expenses associated with the variable annuity. Most variable annuity plans average a "mortality and expense" charge of about 1.2% a year and each separate account you choose may add another .8 % to .9% a year plus administrative costs. Mutual funds also have fees. Some funds require you to pay a sales charge when you purchase it, while others require you take a number of years to pay off its sales charge or are considered to be no-load mutual funds. Regardless of the mutual fund you choose, you will have to pay internal fees which may include management and those pesky 12(b)1 fees. The average yearly mutual fund fees generally run .75 to 1.3%, depending on the fund. By now you are wondering why anyone would use a variable annuity for retirement planning? Actually, that is for you to decide not me. F.Y.I., those investment specialist crying about an annuities' surrender charges should never sell B-share mutual funds, because there is not much difference.

    The variable annuity has one defensive stand left? Let us say two people invested $20,000 in a variable annuity and the other in XYZ Mutual Fund. Both of these people die before spending a dime of their retirement accounts. At the time of death, each person had

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