I am 94 years old. Can I still buy an annuity in my IRA?

Q. I am 94 years old and have an IRA account. Can I still buy an annuity with IRA funds?

– Go strong

A. Maybe, but the bigger question is whether you should.

On the bright side, annuities can be a valuable source of retirement income.

“They can provide guaranteed income that you can’t survive, ”said Jody D’Agostini, certified financial planner at Equitable Advisors / The Falcon Financial Group in Morristown.

She said that a so-called immediate annuity can be purchased with a one-time premium or a lump sum. This will create an income stream that you can continue for a set period of time or your entire life, depending on how it’s set up.

“It depends on the insurance company as to their age limits, but some allow purchase up to age 100. Many insurance companies stop selling them at age 95,” she said. . “The payment depends on your age and your life expectancy. IRA annuities are taxed as ordinary income.

Then there are downsides.

Some annuities have high commissions. Additionally, IRAs offer tax-exempt growth, so some advisers say putting a annuity inside an IRA is unnecessary because the IRA already has tax advantages.

Also, you need to make sure you have enough cash in your other accounts because the annuity money will be locked in and you won’t be able to access more than your monthly allowance, D’Agostini said.

Most other types of annuities, such as indexed and variable annuities, have age limits that don’t extend until the 1990s, she said.

Email your questions to [email protected].

Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.