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.

  1. Can a variable annuity be rolled into an IRA?

    Learn how to roll over your variable annuity to an IRA when you retire or change jobs. Here's how to do it without triggering ... Read Answer >>
  2. Are annuities for seniors only?

    Understand the benefits of investing in annuities at a younger age and how fixed or variable annuities might benefit the ... Read Answer >>
  3. What type of investor should consider annuities?

    Learn about the features and benefits of annuities and when to consider one. Investors seeking to secure income for retirement ... Read Answer >>
Related Articles
  1. Financial Advisor

    Annuities: The Good, Bad and the Ugly

    Annuities suffer from a few perception problems. This primer that covers the good, the bad and the ugly of annuities.
  2. Retirement

    How a Fixed Annuity Works After Retirement

    These popular investments can provide a steady stream of income during your retirement years. Here are the details.
  3. Investing

    Things Your Annuity Salesperson May Not Tell You

    Your variable annuity salesperson should tell you many things. But there's a chance they'll leave out some crucial details.
  4. Financial Advisor

    An Overview Of Annuities

    These contracts provide a guaranteed income stream. Learn how they work and their benefits.
  5. Retirement

    Variable Annuities: A Good Retirement Investment?

    Variable annuities provide lifetime payments and tax-deferred growth, but – given their hefty fees – are they right for you?
  6. Investing

    DIY Annuities: What You Need to Know

    Annuities are attractive because they can give you a stream of income, but they can be tricky to buy.
  7. Retirement

    Getting the Whole Story on Variable Annuities

    Variable annuities are another way to save money tax-deferred - but don't jump in blindly!
  8. Financial Advisor

    Advising FAs: Explaining Annuities to a Client

    Conceptually speaking, annuities can be thought of as a reverse form of life insurance.
  9. Retirement

    Retirement Tips: Choose the Best Annuity Provider

    It pays to get the best advice if you are thinking of putting your money into one of these complicated investments.
  1. Annuity

    A financial product that pays out a fixed stream of payments ...
  2. Valuation Period

    The time between the end of the business day of the first business ...
  3. Wraparound Annuity

    A type of annuity that allows the investor (the holder of the ...
  4. Annuity In Arrears

    An annuity that has periodic payments of either interest and/or ...
  5. Deferred Annuity

    A type of annuity contract that delays payments of income, installments ...
  6. Delayed Annuity

    An annuity in which the first payment is paid at a later date ...
Hot Definitions
  1. Perkins Loan

    A loan program that provides low-interest student loans to undergraduate and graduate students who demonstrate exceptional ...
  2. Wealth Management

    A high-level professional service that combines financial/investment advice, accounting/tax services, retirement planning ...
  3. Assets Under Management - AUM

    The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked ...
  4. Subprime Auto Loan

    A type of auto loan approved for people with substandard credit scores or limited credit histories. There is no official ...
  5. Racketeering

    A fraudulent service built to serve a problem that wouldn't otherwise exist without the influence of the enterprise offering ...
  6. Federal Debt

    The total amount of money that the United States federal government owes to creditors. The government's creditors include ...
Trading Center