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The Comparison Series: Annuities vs. IRAs

Social Security alone probably won’t be enough to live on when you’re ready to retire, so it makes sense to prepare for your financial future ahead of time. While there are a number of smart investment options, important considerations including timing, amount of investable assets and strict regulations governing IRAs can make an annuity the better choice.


  • No limit on how much you can invest.
  • Choose between no risk or take advantage of potential market growth. Fixed-rate annuities provide a guaranteed rate of return on your investment. Indexed and variable annuities’ value reflects gains in the stock market while maintaining some protection against losses.
  • May be jointly owned.
  • You can invest at any age.
  • You can choose the schedule for receiving your payments.


  • Annual contributions are limited to $6,000, $7,000 if you are over the age of 50.
  • IRAs may be invested in stocks, bonds, mutual funds — all elements that may be negatively affected by downturns in the economy, resulting in financial losses.
  • Only one owner.
  • Direct contributions to an IRA are not permitted past age 72.
  • There is a required minimum distribution from your account beginning April 1 following the calendar year you reach 70½ if you were born before July 1, 1949, or at age 72 if you were born after that date.

This article is for informational and educational purposes only. It should not be used to make a buying decision. If you would like to speak with a financial professional, please use Annuity Alliance’s contact form.