Individual Retirement Annuity

An Individual Retirement Annuity is a combo product, like peanut butter and jelly swirled together in a single jar. It combines aspects of an IRA and an annuity. As such, an investor gets tax advantages to save for retirement. But, rather than put money in the market, they give up some chance of upside for a guaranteed income in retirement.

The term "IRA" stands for "Individual Retirement Account." It provides a way to sock money away for retirement, with the government giving some tax incentives to help the money grow better over time.

Meanwhile, an annuity involves paying a large sum of money now to receive regular small sums of money down the road. You're essentially buying retirement income by writing a big check today.

An Individual Retirement Annuity combines these ideas. It has the same rules as a regular IRA (related to things like contribution amounts and tax rules), but only applies to annuities, rather than a situation where you manage funds in an active way.