Annuities often stand as a cornerstone in retirement planning, but their intricacies can leave many scratching their heads. In simple terms, an annuity is a financial product designed to provide a steady stream of income over a specified period, typically during retirement. Let’s delve into the fundamentals and explore the different types, benefits, and considerations associated with annuities.

What Exactly is an Annuity?

At its core, an annuity is a contract between an individual and what is an annuity a financial institution, usually an insurance company. The individual (the annuitant) invests a lump sum or makes periodic payments into the annuity. In return, the insurer promises to provide regular payments to the annuitant, either immediately or at a predetermined future date.

Types of Annuities

Annuities come in various forms, each tailored to meet different financial needs and goals:

  1. Fixed Annuities: These offer a guaranteed interest rate over a specified period, providing predictable income. The insurer assumes the investment risk.
  2. Variable Annuities: With variable annuities, the annuitant can allocate their funds among different investment options such as stocks, bonds, or mutual funds. The income generated fluctuates based
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