Annuities and Roth IRAs are both retirement savings options, but they differ significantly in their structure and tax implications. An annuity is a contract with an insurance company that provides a stream of income, while a Roth IRA is a retirement savings account with specific tax advantages.The key difference lies in how contributions and withdrawals are taxed: Roth IRAs use after-tax contributions with tax-free withdrawals in retirement, while annuities can be funded with pre-tax or after-tax dollars, with taxation occurring upon withdrawal.
