The annuity that allows contributions to an IRA is a qualified annuity. The money contributed will grow tax-deferred, and withdrawals will be taxed as ordinary income. There are no restrictions on how much can be contributed or how often these contributions can be made.
What is a qualified annuity?
A qualified annuity has been purchased to contribute to a tax-qualified plan. Pension and profit-sharing plans, simplified employee pensions (SEPs), SIMPLE IRAs, tax-sheltered annuities (TSAs), and IRAs are all examples of such plans.
Contributions to a qualified annuity are taken from your earnings and placed in the retirement plan to accumulate. They are not taxed until you take them out of the account in retirement. Contributions to a non-qualified program are made with money already taxed.
Which Annuities Can Fund An IRA?
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