What's the difference between an individual retirement account (IRA) and an annuity?

Annuities, IRAs
Answers
Sort By:
Most Helpful
October 2016
100% of people found this answer helpful

With an individual retirement account (IRA), you are in control of the investments and you have a greater number of investment choices available to you. You have unlimited upside potential, but you also have downside that can go to zero.

Annuities come in a variety of "flavors" with limited investment choices that are controlled by the issuing insurance company.  Some offer guaranteed income for life, some offer death benefits or spousal income benefits. So your upside is limited but your downside is limited as well. Some annuities have high internal expenses so that they can offer their benefits, further reducing your upside.

October 2016
October 2016
October 2016
October 2016