The summer of 2006 will in my mind be the Summer of the Annuity Slam. There were a lot of misinformed pundits questioning the validity of buying an annuity. However, their criticisms don’t hold much water.

I began my career putting away money in a Simple plan. I had examined other available funds within the plan and found myself appalled to see how miserably they had been performed.

The sad truth, I came to realize, is that going it alone when managing a stock portfolio is next to impossible.

I have made the same mistakes that most investors make; I have bought the hot stocks of the day. I couldn’t resist. The stock is soaring, then it plummets and then we sell. We sell based on the fear of it going any lower.

If I would have known then what I know now and bought a fixed annuity returning an average of 5% I would, needless to say, been in a much better position.

Fortunately for me, I bought and Equity Indexed Annuity product with the funds from my Simple plan. Through regular deposits, I have seen my balance balloon. I have come to understand that I can stomach a 6-7% return over time more than I can to lose 6-7% and have to play catch-up.

What I really like is the fact that it is tax deferred. I don’t want to have to suffer the penalty of paying taxes on gains each year as I would had I bought a CD. If my tax bracket increases, the more I pay in taxes. The more money you have compounding interest the more you will have in your account.

When I retire, my annuity is in my hands. I choose when and how much to withdraw, in turn keeping my taxes in a lower bracket. If I so desire I can turn it into a lifetime of income at anytime.

Many of my detractors will point out the surrender charges intrinsic to an annuity as their downfall. I look at it as a positive. It keeps me from cashing out the money and buying something I would not otherwise need, like more hot stocks or a 200 inch TV.

I also like the insurance company that handles my Equity Indexed Annuity. They have most of their investments in AAA rated bonds. You cannot get any more solid than that. It makes me feel better knowing that in the case of a cataclysmic event that my money, and gains, are safe.

I bought this annuity with $10,000; the minimum deposit in my product, and have seen the account value grow to a place that makes me smile. This is a stabilizer in my portfolio. I have more money in guarantees than guesses. I don’t want to play the guessing game when it comes to returns. You can call me a prude, but also call me prudent.

The best thing you can do is get a second opinion from an Insurance Agent that is well versed in Annuities and taxation. Your Broker may be your buddy, but he may not be doing what is in your best interest.