An annuity is a financial product that pays out a fixed stream of payments over a period of time. Annuities can be used for a variety of purposes, including retirement income, life insurance, and estate planning.
The payments from an annuity are typically made on a monthly or yearly basis, and the length of the payout period can vary depending on the type of annuity. Some annuities have a set payout period, while others continue paying out as long as the annuitant (the person who purchased the annuity) lives.
Annuities can be either fixed or variable. Fixed annuities provide a guaranteed rate of return, while variable annuities offer the potential for higher returns but also come with more risk.
Annuities can be a valuable addition to any financial portfolio, but it’s important to understand how they work before making any decisions. Talk to a financial advisor if you’re considering purchasing an annuity.