By Rebecca McReynolds Don't fret if higher income takes away your IRA deduction. Tax-smart options abound. But contribution limits and income ceilings on tax deductions leave many investors out in the cold.
IRAs offer broad investment choices and low fees.
Annual insurance fees average 1.3 percent. That's only about half the 28 percent the tax man often takes from taxable accounts. And because of this advantage, according to the National Association of Variable Annuities and PricewaterhouseCoopers, the average variable annuity outperforms comparable taxable mutual funds after about 5.5 years. Still, annuities should be a last resort. Beyond those choices, the old tax-friendly standbys, municipal bonds, are an option for those who need unfettered access to their savings.