A deferred annuity might not be appropriate if you:

1. Have no other source of "ready cash" for small emergencies. 2. Cannot set aside a premium contribution for a relatively long period of time, such as five to seven years. The main drawback of an annuity might be that the funds you put in are not easily accessible. You can withdraw them, of course, but if you do so early in your contract you may have to pay surrender penalty fees - in addition you may be subject to a 10% tax penalty if you withdraw the funds before you are 59 +. 3. Have not made the maximum contribution to a 401(k) tax-qualified plan. If your employer offers a 401(k) plan, contribute as much to it as you can. Your contributions are tax-deductible, and your employer will often match some of your contributions. 4. Have significant high-interest credit card debt. As a rule, it is more cost-effective to pay down high-interest debts before considering any investment alternative.