No. of Recommendations: 1
I am going to post a dissenting opinion, or it may be.

Find out what the M&E fees are for your IRA, as well as the "investment advisory fees". These may be quoted in different parts of the contract, or even in different documents.

No one can really say that annuities are always worse than no-load, low-expense mutual funds, just that it is almost always the case if one is looking for them for investments and not for the insurance part. (Two exceptions that come immediately to mind are TIAA-CREF and Vanguard--both are well known for their low expenses.)

If one wants the insurance component (which may guarantee that the beneficiary will receive at least the premiums if they are more than the current balance when the owner dies before annitiizing the annuity--different contracts may specify different levels of insurance), it may be worth it, but quite frankly I personally don't know anyone who has purchased an annuity primarily for that insurance aspect.

If you find the annuity expenses (the M&E plus the "investment advisory fees") are more than about 0.3%/yr, you may want to see what you can manage someplace else, such as TIAA-CREF ($250 minimum or $25/mo minimum) or Vanguard ($1,000 minimum whether or not one goes for an "automatic investment plan").

Act fast! (Sorry, it smells of a spam when one talks about acting fast, but your time to act may be quite limited.) If you decide to move your IRA out of that annuity to someplace else, you will typically have a brief inspection period to read over the annuity contract, as short as 10 days after receiving the contract or up to a month, but it is usually limited until one starts facing significant surrender charges. (Not all annuities have surrender charges, but the vast majority of them do.) If you fall within that grace period, you may have to act fast to set up a trustee-to-trustee transfer to preserve the sheltering of the money already placed within the IRA. (You have to obey the IRS guidelines for IRA transfers--this is not a "1035 exchange" though the insurance company will probably have a general-purpose form that may mention "1035 exchange" on it, but rather an IRA tranfer.)

On the other hand, if what you are in is a low-expense annuity (one of the very few exceptions to high expenses), and you find the terms spelled out in the contract acceptable, you may want to leave your money there.

Good luck!
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