Frequently Asked Question

July 08 2009 | Filed Under » , , ,

Is it wise to put an IRA account into a fixed or variable annuity?

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.
by

Steven Merkel

Steven Merkel
Steven T. Merkel, CFP®, ChFC, is the Managing Director of wealth management operations for Piedmont Investment Advisors, LLC in Naples/Bonita Springs, Fla. Steve is a former U.S. Army air defense artillery officer and has been giving financial advice for more than 16 years. He is a Certified Financial Planner® practitioner and a Chartered Financial Consultant. Mr. Merkel has been featured and widely quoted in numerous publications including The New York Times, BusinessWeek, Entrepreneur, Consumer Reports, Investment News, Financial Planning Magazine and Fidelity's Stages Quarterly. He enjoys fishing, golf, military history, Miami Hurricane football and relaxing on the beaches of South Florida.
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