Annuity vs. IRAs

Both the annuity and the Individual Retirement Account (IRA) offer the owner the opportunity to save money for retirement. Both also allow owners to delay paying taxes on the earnings until withdrawals begin after age 59 ½. But there are differences between annuities and IRAs also. Contributions to annuities aren’t tax deductible whereas contributions to IRAs are tax deductible depending on your tax bracket. IRAs also have a maximum allowable annual contribution limit. There is no limit to how much money you can contribute to an annuity.