Purchase of Annuities
IRA can be used to purchase annuities. This is a financial planning strategy designed to provide a steady income source for retirement. By purchasing annuities through an IRA, you can convert a portion or all of your IRA funds into annuities, which can provide a stable guarantee for your retirement life, helping manage financial needs during retirement.
Using an IRA account to purchase annuities may offer tax advantages because the earnings from annuities are tax-deferred during the accumulation period until you begin receiving payments. This brings many benefits, as typically the tax rate after retirement is lower than during working years, and there’s no need to pay taxes annually, resulting in higher compound interest gains over time.
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