Annuities

Annuities are financial products that provide a steady stream of income, typically for retirement, in exchange for an initial lump-sum payment or a series of payments. Offered by insurance companies, annuities can be structured in various ways, including fixed, variable, immediate, or deferred, depending on the investor’s needs and preferences. Fixed annuities guarantee a specific payment amount, while variable annuities offer payments that can fluctuate based on the performance of underlying investments.

Example

A retiree might purchase a fixed annuity with a $100,000 lump-sum payment and receive $500 per month for the rest of their life.