In my opinion, annuities have gotten a bad rap for legitmate reasons: high expenses, low returns and deception among those promoting them. That's not to say SOME annuities aren't a decent choice for SOME people. But probably not you.

Look at tax-managed mutual funds, such as those at Vanguard. Returns are not low. For example, over the last 5 years, their tax-managed smallcap fund has returned 13% per year on average. That's 6% per year better than the S&P 500. Over the long haul, you'll end up much better off with tax-managed funds than any annuity.

Just my 2.5 cents.

You should also consider an Health Savings Account (HSA). Requires you to have a high deductible health insurance plan, but will allow you to sock away some more before tax money (above the line deduction on your 1040) that grows tax free (if you use it for qualified health expenses).

For more info: www.hsabank.com

It is best to hold individual stocks, Exchange Traded Funds (ETFs) or tax efficient index mutual funds in your taxable accounts. The ETFs and index funds will give you more diversification than just buying a few large cap companies. IShares and Vanguard have some great ETFs that you should consider.

For more info: www.ishares.com, www.vanguard.com

Good luck!

This is where a variable annuity might be practical. Check into them.
We all know there are high fees for some of them but after you have put all you can in a 401K and IRA's maybe this is the right place.