An annuity is an insurance product that allows you to receive a stream of payments in exchange for an upfront investment. The payments can be made on a regular basis, such as monthly or yearly, and can last for a specific period of time, such as 10, 20, or 30 years.
Annuities can be used for a variety of purposes, including retirement income planning, estate planning, and tax-advantaged investing. In general, annuities offer stability and peace of mind by providing guaranteed income for life.
While annuities have many advantages, it’s important to understand their drawbacks before making any investment decision. Annuities typically have high fees and commissions, which can eat into your investment returns. Additionally, annuities are not liquid investments, meaning you may have to pay a penalty if you need to access your money early.
Overall, annuities can be a helpful tool for achieving your financial goals. However, it’s important to do your research and work with a financial advisor to make sure an annuity is right for you.