- An annuity pays income in retirement and generally provides tax benefits
- The three types of annuities, fixed, variable, and income, provide different benefits for different retirement income needs
An annuity is a long-term insurance product that pays out income. Many people purchase an annuity to provide a combination of protection, tax deferral and income in retirement.
An annuity provides you with scheduled payments of a lump sum, depending on the type of annuity you purchase.
Each of the three annuity types offers unique benefits for individual retirement income needs:
- Fixed annuities provide a guaranteed principal and guaranteed rates of return, plus tax benefits. All guarantees are subject to the claims-paying ability of the issuing company.
- Variable annuities offer the potential for greater income based on market performance. Variable annuities are complex investment vehicles that are subject to market risk, including the potential loss of principal invested.
- Income annuities provide a specific amount of income for the rest of your life or for a specified length of time.