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

Annuities, IRAs
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October 2016
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Hello,

It really depends on your purpose. If you want to simply defer tax, then both vehicles can do that. In fact, if you have maxed out all retirement savings, such as 401(k), IRA, and HSA, but still want to defer tax further, you can use an annuity for that purpose. 

On the other hand, if you haven’t fully contributed to your 401(k) or IRA, you may want to stay away from the annuity unless you’re near-retirement. Why? When people are close to the retirement or already in the retirement, they want to safeguard their nest egg and/or need some form of a lifetime payment. In that case, an annuity may be considered. You can work with a CFP® or RICP® to figure it out which type of annuity may benefit you the most. 

October 2016
October 2016
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October 2016