Annuity vs. IRA for Retirement

Annuity vs. IRA for Retirement
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Anne Johnson
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When preparing for retirement, you’re faced with financial choices. One is whether to open an individual retirement account (IRA) or purchase an annuity. Although both are sound retirement mechanisms, they are different in how they work and are financed.

But how do they work, and do they both have tax advantages? It’s essential to have the facts about annuities and IRAs to make an informed decision.

How Does an Annuity Work?

An annuity is an insurance product, and it is a long-term contract. You invest your money in this product and, in return, you receive regular payment through annuitization. Annuitization is a guaranteed lifetime income benefit.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property & casualty insurance agent for nine years. She was also licensed in health and life insurance. Anne went on to own an advertising agency where she worked with businesses. She has been writing about personal finance for ten years.
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