Advice sought on how to avoid the alternative minimum tax

Our personal-finance expert tracks down the answers you need.

from the March 5, 2007 edition

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Q: I have taken $32,000 from my variable annuity and put it in an equity-indexed annuity on the advice of a friend. I have no one to advise me on money matters, and all I know is I was getting 3 percent on the annuity. Was this a wise move?
M.F., Deerfield Beach, Fla.

A: Hard to say. Both variable annuities and equity-indexed annuities are complicated products, says Vince Clanton, a certified financial planner in Atlanta. Each carries a surrender charge that is imposed if you cash them in too early. So if you move from one product to another, you'll probably rack up costly fees along the way, he says.

Besides that friend who dished out advice, you might consider tracking down a financial planner who can give you some professional guidance. For a list of qualified people in your area, you can contact:

•Certified Financial Planner Board of Standards. (www.cfp.net, 888-237-6275).

•Financial Planning Association (www.fpanet.org, 800-322-4237).

•National Association of Personal Financial Planners. (www.napfa.org, 800-366-2732).

This is your money, so ask questions. There are no dumb ones in Mr. Clanton's book. Keep asking them until you're satisfied that you understand, and that the product meets your specific needs.

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