Why You Should Invest In Annuities Through IRA and Why

Annuities are fixed sums of monies paid to an individual annually for the rest of their lives.

IRA is the acronym for Individual Retirement Account. Through an IRA, individuals get to save retirement funds in a tax-advantaged way. They make contributions with monies they deduct from tax returns.

Moreover, any earnings can be tax-deferred until they are withdrawn upon retirement.

So, why invest in annuities through IRA and Why?

An annuity invested in an IRA will help you attain tax-deferred growth as well as a guaranteed income stream.

Dedicate a portion or all your 401 (k) into an IRA through an annuity as an intelligent person. By doing so, you will create either a personal pension or a guaranteed income stream.

If all your assets are in retirement accounts and you opt for an annuity, the only investment option is to have them inside an IRA.

Are There Penalties on Annuities IRA Withdrawals?

If you invest your annuities in an IRA or 401 (k) plan and proceed to make withdrawals before the age of 59½, you will pay a 10 percent federal tax penalty.

Kindly note that even after attaining the minimum age, many variable annuities have an initial surrender clause.

The period varies between six and eight years in which you will pay a surrender charge when you exceed a preset annual limit amount.

Why Invest Annuities in an IRA?

If you are worried about your portfolio should there be a market crash or if you believe you are likely to outlive your money, it’s advisable to move funds from your IRA into a variable annuity.

Parting Shot

When it comes to investing annuities into an IRA, you should create a sound financial plan. Consider numerous factors to spread your annuities before going all in an IRA.