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What is the difference between an annuity and an IRA?
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The primary difference between an annuity and an Individual Retirement Account (IRA) is that an annuity is typically a contract in which an individual agrees to make regular payments to a third party, usually for life or over a specified period of time. An IRA, on the other hand, is an account funded by contributions from the individual and may be invested in stocks, bonds, mutual funds, or other assets. Withdrawals can be made at any time without penalty, but taxes must be paid when money is withdrawn from IRAs.