NEW YORK (AP) _ In some conversations about retirement planning these days, annuities are displacing individual retirement accounts as the prime subject.

IRAs, of course, have lost a bit of their luster for those savers and investors who can no longer deduct annual contributions of up to $2,000.

Furthermore, while anybody can still make nondeductible IRA contributions, doing so means taking on some formidable tax paperwork.

Enter the advocates of so-called deferred annuities, proclaiming the still- intact virtues of these vehicles after tax reform.

''Today's annuity plans, offered by some of the nation's largest life insurance companies, are more attractive than ever as companies struggle to boost their market share of investment dollars,'' says Donoghue's Moneyletter, a financial advisory publication.

The number of choices open to the would-be annuity investor can be daunting. These products come in more varieties than the common cold.

But the vehicle getting most of the attention right now isn't all that complicated - it simply wraps an investment in a mutual fund family in the coating of the tax advantages that an annuity provides.

''All income taxes on capital gains and dividends are deferred until a withdrawal is made from the account,'' says Glenn Sinichko of Cleveland-based Prescott, Ball & Turben Inc. in the firm's monthly Investor News. ''Transfers from one fund to another are tax-free.''

As with a standard taxable investment in mutual funds, there is no limit on how much you can put into your account in any given year - another edge for annuities over IRAs.

As even annuities' biggest fans will readily admit, they aren't the answer for everybody.

If you have access to an employer-sponsored 401(k) retirement savings plan where you work, it may make better sense. The contributions you make to a 401(k) are deductible, and many employers kick in extra amounts when you make contributions.

Similarly, if you are self-employed, you might look first at a Keogh plan, which allows generous deductible contributions.

Aside from these situations, however, the Donoghue letter argues that ''you'll be hard-pressed to find a better, more flexible tax-deferred retirement plan'' than what annuities offer.

Shoppers for annuities need to ask quite a few questions. Conservative investors who opt for a fixed-rate annuity need to focus particularly on the guaranteed benefit offered by any given contract.

In this area, advisers say, beware the plan that offers a temptingly high return in the early stages, but that can subsequently revert to low returns in later years.

Furthermore, what surrender charges does the contract spell out if you should want to take your money out before you reach age 59 1/2 ?

With any annuity, as with an IRA, such a withdrawal would incur a 10 percent penalty tax from Uncle Sam. The seller of the annuity may or may not charge you an additional penalty.

Then there is the matter of costs. Modern annuities offer plenty of choices that don't come with the large up-front sales charge that used to be standard in the industry.

Still, it's advisable to check annual contract fees and asset charges collected by the insurance company, which come atop management fees assessed by the firm that runs the mutual funds.

Lastly, you need to take a look at the fund family itself. Does it offer the kinds of funds that suit your goals and temperament? What is its past performance record?

If you buy a variable annuity, it is imperative to remember, you have the hope that your money can grow along with the forward advance of the financial markets - and the risk of poor results if the markets don't advance, but retreat.

End Adv PMs Thursday March 23

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