do i have to roll my defined benefit plan into an annuity or can i use an IRA Rollover?

Answer 1

It probably depends on your particular defined benefit plan; check with your benefits administrator to see how disbursements are handled. If you have a choice, I would recommend talking to a financial advisor. Many younger workers would choose the IRA because of lower fees and increased flexibility while older workers nearing retirement might opt for the annuity because of the associated safety and guaranteed income. Another difference is that you have contribution limits to an IRA but not with an annuity. Also, you can only donate earned income to an IRA while you can fund an annuity with any money you have. Either way you should have a choice to directly rollover or indirectly rollover. If you don’t need any of the money, you should directly rollover the funds.

If you would like to talk with retirement planners who specialize in annuities, try MostChoice.com. You can view annuity interest rates online and speak to annuity representatives without charge or any obligation to purchase anything from anyone. Remember that the Achilles heel of annuities is their fees – they are higher than most other retirement investments. Be sure that anyone you speak with about annuities tells you about ALL the possible fees you’ll have to pay. Having said that, annuities remain a popular retirement investment destination.

You can find MostChoice.com here:
http://www.mostchoice.com/annuity.cfm

Hope this helps,
Barnes@MostChoice

Answer 2

If you are looking at flexibility, IRA Rollover is the better option but if you are looking at a steady cash flow Annuity might work better. But Annuities are pricey so you will need to shop around.

Answer 3

IRA Rollover, do not buy an annuity, too many fees

Answer 4

Annuities have gotten a bad rap in the past. Things aren't like that now.

My suggestion to you, get an advisor. Even though you do have to pay fees, you will earn more in the long run.