Markets· August 16, 2026 at 03:20 p.m.
Annuity Purchase Inside IRAs Duplicates Tax Deferral, Adds Fees
Key takeaways
- Annuity purchase inside IRAs duplicates tax deferral benefit
- High risk-free yields make annuity fees more significant
- IRA balances vary by generation
A retiree's decision to move $300,000 from an existing IRA into a variable or fixed annuity held inside the same IRA is a common occurrence in retirement planning. However, this practice duplicates a tax deferral benefit that the IRA already provides and adds fees on top of existing ones, especially when risk-free yields are high.
