How does an annuity compare to an IRA for retirement?
Annuities and IRA differ in a number of significant areas. Not everyone can open an IRA only those with earned income. Anyone can purchase a fixed-rate annuity. When contributing, you are limited to $3000 annually with an IRA; there are no limits with an annuity. On the tax front, IRA contributions may be deductible, although the law imposes limits based on income and pension-plan coverage. Generally, no deductions are allowed for payments to an annuity. If you are not allowed a deduction for your IRA contribution, an annuity is a smart alternative your money still grown tax-deferred.
