What Is an Annuity?

An annuity is a contract with an insurance company that can provide guaranteed income, often for life, in exchange for a lump sum or series of payments.

For many people approaching or in retirement, annuities offer something savings alone can't: predictable income you can't outlive, with protection from market swings, depending on the type you choose.

Common Types

Fixed Annuities

Earn a guaranteed interest rate for a set period. Simple, stable, and predictable.

Fixed Indexed Annuities

Earnings are linked to a market index with a floor that protects your principal from market losses, offering growth potential with downside protection.

Immediate Annuities

Convert a lump sum into income payments that can begin right away, often used to create a personal "paycheck" in retirement.

Who Annuities May Suit

People who want guaranteed income they can't outlive
Savers looking to protect principal from market losses
Those seeking to supplement Social Security or a pension

Annuities are long-term financial products with terms, limitations, and potential surrender charges. Guarantees are backed by the issuing insurance company's ability to pay claims. This information is general and not financial, tax, or legal advice; a licensed professional can help you decide what fits your situation.