An annuity is a unique financial vehicle designed to help people accumulate money for their retirement and/or turn a lump sum of money into a guaranteed stream of income payments.

Deferred annuities offer the advantage of tax deferral and are used to accumulate money for retirement. There are two types of deferred annuities: fixed and variable.

Fixed deferred annuities pay a fixed rate of interest. Variable annuities usually offer investment options such as stock, bond, money market, and specialty funds.

Income annuities are used to generate a stream of income payments that is guaranteed to last for as long as you need it to - even for the rest of your life.

Income annuities can be used by a business to pay pension benefits to retired employees. Or they can be used to provide for a spouse as in the case of a Joint and Survivor Annuity.
Learn more about annuities in the "Related Articles" section.