Annuity

Annuity is a financial term that refers to a series of regular payments made to someone over a specified period of time. Annuities are often used as a retirement planning tool. People invest a certain amount of money into an annuity, and in return, they receive a guaranteed income for a specific number of years or for the rest of their life. There are different types of annuities, such as fixed annuities and variable annuities. In a fixed annuity, the payments remain the same throughout the term, providing a stable income. On the other hand, in a variable annuity, the payments may vary based on the performance of the underlying investments. Annuities can offer benefits like tax-deferred growth, meaning you don’t have to pay taxes on the earnings until you start receiving the payments. They can also provide a sense of financial security and stability during retirement.