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    Taxes & Annuities

    Roth IRA Annuities

    A Roth IRA annuity combines tax-free retirement income with the guarantees of an annuity — potentially one of the most powerful income tools in retirement.

    Roth IRA paperwork and retirement planning notebook
    A Roth annuity can deliver tax-free guaranteed income for life.

    What Is a Roth IRA Annuity?

    An annuity funded inside a Roth IRA. Contributions are after-tax, and qualified withdrawals — including any income payments — are completely federally tax-free.

    Why Combine Roth and Annuity?

    You get the income guarantees of an annuity layered on top of the tax-free withdrawal status of a Roth — meaning lifetime income with no federal tax bill.

    Roth Conversions to Annuities

    Some retirees convert traditional IRA dollars to a Roth, then fund a Roth annuity. The conversion is taxable now, but creates future tax-free income — a strategy that can shine in low-bracket years.

    Considerations

    Conversions raise current-year taxable income. The 5-year Roth holding rules still apply. RMDs do not apply to original Roth IRAs during your lifetime.

    The Bottom Line

    A Roth IRA annuity can be a powerful piece of a tax-diversified income plan — especially for retirees concerned about future tax rates.

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