One way the financial industry has chosen to address the problem of outliving your savings is by creating annuities. An annuity is a product you purchase which, in return, provides you with a number of regular payments. The details of when these payments begin, how long they continue, and how much they will be are all spelled out in the terms of the annuity. Some annuity IRAs may even offer a death benefit, similar to a life insurance policy.

You can get the best of both words – IRAs and annuities – by choosing an annuity IRA. But how do you choose an account provider?  Annuity IRAs are most frequently offered by insurance companies.  This makes sense if you think about it, since annuities were originally a produce offered by life insurance companies alongside traditional whole and term life insurance products.  In addition to using traditional means of assessing the financial stability and performance of a life insurance company, the following are some things to consider when choosing a provider for any type of retirement plan.

First, compare the annuity IRA’s investment options. Diverse options can help you weather economic changes more easily. The old saying about putting all your eggs in one basket is still true today.  The investment options offered by a potential provider should be diverse and in keeping with your individual preferences regarding investing.

You should also consider your own personal tolerance for risk. There’s nothing wrong with choosing low risk investments or high risk investments, or choosing a mix of the two. It all boils down to how much money you hope to earn, and how much you are willing to risk for that potential with your IRA annuity. It’s very much a balancing act – one that’s different for every individual. How long you have before you reach retirement age is very much a factor in this consideration for most investors.

Next, look at how well a potential IRA annuity provider’s investments are performing. After all, it doesn’t matter if the portfolio looks perfect if it isn’t earning any money.

Also, you should take a look at the fees charged by each IRA rollover annuity provider. A small difference may not seem like much now, but do the math – small bits add up over time, especially if you have a number of years to go before retiring. Each provider is required to disclose its fees, but it’s up to you to crunch the numbers and see what those fees really mean.

Last, but not least, consider customer service. Does the provider have local offices if and when you need face to face help? How about a website with robust functionality? Or, what about the ability to make changes via telephone?

Choosing an Annuity IRA rollover account provider will take some time, but it is time well spent. After all, it’s your future you’re planning!

Why Choose an Annuity IRA?

For starters, know that if you retire or change employment, you can rollover your retirement funds from a 401k or 403b to an annuity IRA in order to enhance your investment options and plan for the future.

Annuities that receive money from a 401k (or that are IRA approved) allow insurance companies to create an IRA annuity.  This means that you can directly deposit your retirement funds with the insurance company in the form of an IRA annuity.  If you are retiring in the near future, you may want to rollover to an immediate annuity that allows for instant payments.  On the other hand, if you’re simply changing employers and have a while until you plan to retire, you should rollover to a deferred annuity.

Annuities often provide higher interest rates than many banks and savings accounts and can offer significant protection for your principal investment.  They also offer significant tax-deferral advantages, especially when put into tax-deferred IRA accounts.  If you’re concerned with the current state of the economy, you may be more focused on the preservation of your funds than their growth.  The IRA annuity offers a safe and secure option to ensure that you have enough money for your retirement.

Another reason that many people choose an IRA annuity is the protection of the principal investment amount.  Although all investment opportunities involve some level of risk to the money invested, annuity IRA accounts offer some level of guarantee against their total loss.

Setting up an IRA Rollover Annuity

An IRA annuity is issued by insurance companies and basically ensures that you will receive a regular pension payment throughout your retirement.  You can begin to receive your annuity payments after you reach the designated retirement age, which is currently set at age 59 ½.  There may be high fees associated with setting up an IRA annuity initially; however, there’s also a significant degree of safety associated with this type of investment.

If you want to retire before the age of 59 ½, but don’t want to pay the 10% tax on distribution required by the IRS, you should consider an IRA annuity as way to gain immediate income.  An insurance company sells you this annuity and provided you are receiving the funds as a regular pension payment you avoid the tax.  For individuals who wish to retire early, the IRA annuity rollover can offer some great benefits over other types of investments.

Insurance does cost a premium, but it also provides protection and peace of mind.  An IRA annuity will provide a guaranteed death benefit, guaranteed minimum withdrawal pensions and guaranteed minimum income benefits – very strong incentives to perform an IRA annuity rollover as part of your retirement savings plan.