An Annuity is a contract between an investor and a financial institution in which the investor deposits money for a set period of time. In return, the institution agrees to pay out that money in fixed installments over a specific period of time or until the annuitant dies. Annuities are mainly used for retirement planning, as they can help individuals address the risk of outliving their savings.There are two main types of annuities: immediate and deferred. An immediate annuity begins paying out immediately, while a deferred annuity doesn't start making payments until some point in the future. There are also several different types of deferred annuities, including fixed-rate, variable-rate, and indexed-based contracts.When choosing an annuity, it's important to consider your needs and goals for retirement planning. Some factors to think about include how long you want your payments to last, whether you want any guarantees on your investment returns (or not), and what kind of risks you're willing to take with your money. It's also important to consult with an experienced financial advisor before making any decisions about purchasing an annuity contract.
