Buying an annuity inside an IRA duplicates the tax deferral the account already provides for free, while also adding fees of 1% to 3% or more annually.
With 52-week T-bills yielding 4.02% and I-bonds at 4.26%, annuity fees directly erase returns available risk-free inside the same IRA.
Average Boomer IRA balances of $257,002 mean an annuity purchase often consumes an entire account, concentrating fee drag on every dollar saved.
Many financial professionals are salespeople paid on what they push, not whether you end up wealthier. A fiduciary is the opposite. The SEC legally requires them to put your interests first. Advisor.com's free matching tool pairs you with vetted fiduciaries from major national firms, all in under three minutes. See who you match with today.
The decision at the center of this story is one financial planners see often: a retiree moves $300,000 from an existing IRA into a variable or fixed annuity held inside that same IRA, with the pitch centered on tax deferral. The problem is structural, as an IRA already provides tax deferral. Wrapping an annuity inside an IRA duplicates a benefit the account already provides and adds a fee layer on top of one that already exists, during a period when risk-free yields are the highest they have been in over a year.
#free #deferral #duplicates
With 52-week T-bills yielding 4.02% and I-bonds at 4.26%, annuity fees directly erase returns available risk-free inside the same IRA.
Average Boomer IRA balances of $257,002 mean an annuity purchase often consumes an entire account, concentrating fee drag on every dollar saved.
Many financial professionals are salespeople paid on what they push, not whether you end up wealthier. A fiduciary is the opposite. The SEC legally requires them to put your interests first. Advisor.com's free matching tool pairs you with vetted fiduciaries from major national firms, all in under three minutes. See who you match with today.
The decision at the center of this story is one financial planners see often: a retiree moves $300,000 from an existing IRA into a variable or fixed annuity held inside that same IRA, with the pitch centered on tax deferral. The problem is structural, as an IRA already provides tax deferral. Wrapping an annuity inside an IRA duplicates a benefit the account already provides and adds a fee layer on top of one that already exists, during a period when risk-free yields are the highest they have been in over a year.
#free #deferral #duplicates
2 months ago
