How is a Rollover IRA different from a Rollover Annuity?
A. The main differences are the investment choices they offer and their cost. You can fund a Rollover IRA with almost any type of investment — from CDs and mutual funds to stocks and bonds. With a Rollover Annuity, the investment choices depend on which type of annuity you select. A fixed annuity offers you a guaranteed, fixed rate of return. A variable annuity allows you to allocate assets in variable investment options. A Rollover Variable Annuity also may cost more than a Rollover IRA. That’s because you’re paying for the two additional benefits most annuities offer: a guaranteed death benefit and a guaranteed income for life, which are subject to the claims paying ability of the issuing insurance company.
