Annuity Inside IRA Costs $300,000 with 1-3% Annual Fees

A $300,000 annuity purchase inside an IRA duplicates tax deferral already provided by the account, leading to added fees of 1% to 3% annually. 52-week T-bills yield 4.02%, while I-bonds yield 4.26%, highlighting that annuity fees can erase potential returns. The average Boomer IRA balance is $257,002, meaning that purchasing an annuity can consume significant portions of such accounts. Investors should consider these costs against the benefits of tax deferral when evaluating their retirement savings options.