A:

The answer to this depends on an individual's investment goals, requirements and risk tolerance. During the 1990s, the majority of seasoned financial planners would tell you that it's not a wise move to put an IRA account inside of an annuity. This was because IRA accounts already receive tax-deferred growth of earnings; so why pay an extra fee that cuts into your overall return for an annuity that just overlaps a feature that you already have?

However, the 2000s have thrown several curve balls at investors, as they now struggle with market volatility and large losses in investment accounts. As an investor, if you're looking for principal protection, guaranteed income for life and guaranteed death benefits from your IRA, then annuities are definately a viable option.

For more information, read An Overview Of Annuities and Annuities: How To Find The Right One For You.

This question was answered by Steven Merkel.

Hot Definitions
  1. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  2. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  3. Mezzanine Financing

    A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies. Mezzanine financing ...
  4. Long Run

    A period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all ...
  5. Quasi Contract

    A legal agreement created by the courts between two parties who did not have a previous obligation to each other. A normal ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center