You can directly transfer your pension lump sum or IRA into an annuity without adverse tax consequences. Your employer can roll over your 401k into an annuity without having to withhold any taxes. There is no mandatory withholding requirement if your funds are rolled over directly into an annuity.

Depending on what you wish to accomplish with the annuity, you can roll over your IRA or 401k into any of the following 3 types of annuities:

CD-type deferred annuity - A CD-type annuity is a fixed-rate annuity in which the interest rate guarantee period matches the surrender penalty period.

Equity-Indexed Annuity - This type of annuity offers a stock market-driven investment with potentially attractive returns and a guaranteed minimum return.

Immediate income annuity - An immediate annuity begins making regular monthly payments to you shortly after you deposit your money with the insurance company,usually within 30 days. . The rates quoted for immediate annuities are in a different format than those for a deferred annuity. The reason for this is that your immediate annuity rate is influenced by your age, gender, and choice of payment options, all factors which have no bearing on a deferred annuity rate.

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