Expert: Allen - 3/20/2007

Question
I would like to use my regular ira funds(50K) to buy a annuity. I am 62 and my social security payments are going to be low. Is this a good idea? Can this be done? Any suggestions?

Answer
You can use your IRA to purchase an annuity from an insurance company. After you decide which company you want to purchase the annuity from, you would transfer the funds in your IRA to an Individual Retirement Annuity at the insurance company. Unfortunately, the amount of income will not be substantial maybe $300-$350 per month.

One suggestion I have is to shop around. Also make certain the paperwork is completed properly.

Whether it's a good idea, is something I can't answer. It probably is. However only you can decide the best way to reach your funds. A financial planner can help you decide. If you go this route, make certain you use someone who charges a fee for his services rather than being compensated by commissions on the annuity or other investment products.