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Best IRA Rates with Fixed Annuities

Published: February 06, 2016 Categories: Annuity Strategies, Finance, General Interest

Most investors want to maximize the value of their individual retirement account (IRA) not only for their own financial needs, but also for their surviving loved ones. These accounts were created to provide a tax favored way of saving for and increasing the long-term growth of one’s retirement savings.

Many IRA owners incorrectly believe that once their money is invested, they may never touch or move their IRA again if unsatisfied. However, IRA’s are under the complete control of the individual investor. If unsatisfied with their current investment returns, then those IRA owners have several options, such as moving their funds via an indirect rollover or a direct rollover/transfer. One commonly overlooked and highly beneficial IRA option is annuities.

Fixed annuities are a great IRA alternative because they offer competitive interest rates, they are principal guaranteed and are never affected by a downturn in the stock market. Annuities provide IRA owners a safe and secure way to grow their retirement funds. Compared to other IRA options such as bank CDs, savings accounts, treasuries and money market funds, fixed annuities typically offer higher interest rates. Other options include fixed indexed annuities, which credit interest based on the performance of a stock market index, while also protecting contract owner’s funds from any risk of loss.

There are two primary methods of moving money from an existing IRA to a new, better IRA; an Indirect Rollover or a Direct Rollover/Transfer.

INDIRECT ROLLOVER
If you want to rollover an IRA by taking receipt of the funds, either Traditional or Roth, you need to request a check from the current trustee or financial institution that handles your IRA. They will issue a check made payable to you and will report the distribution to the IRS. You are then free to do whatever you want with the money. As long as you reinvest the money from the old IRA into a new IRA within 60 days, your IRA will remain intact and you won’t owe any federal income tax or penalties on the distribution. So, as you can see, it’s very important to make sure that the funds are put back into your new IRA within 60 days. Currently, the IRS allows you to make only one rollover in this fashion from an IRA to another IRA in any 12-month period, regardless of the number of IRAs you own.

DIRECT ROLLOVER/TRANSFER
In most cases, it is preferable to transfer your funds directly from one IRA trustee or financial institution to another. By doing a direct rollover/transfer you avoid the risk of owing any federal income tax or tax penalties and you don’t have to worry about the 60-day requirement. Unlike an indirect rollover, which can only be done once in any 12-month period, the IRS does not place any limitations on the number of trustee-to-trustee transfers between IRAs that can be completed.

AnnuityAdvantage prides itself in excellence and will walk you through the entire process to ensure that you get the right annuity that is best suited for your individual situation. Because we offer a wide range and diverse selection of IRA annuity options, we take the time to weigh the pros and cons of each alternative with you. To receive additional information about the best IRA alternatives, please give us a call. In these uncertain times, protecting your nest egg and earning a competitive IRA rate of return is more important than ever.