Plain-English definitions, reviewed by an independent investor
Annuity
An annuity is a contract, usually with an insurer, that pays a stream of income for a set period or life.
An annuity is a contract, usually with an insurer, that pays a stream of income for a set period or life.
(Premium now for scheduled future payments)
Why it matters
It is a common tool to turn savings into guaranteed retirement income.
Common confusion
Fees and inflexibility are real trade-offs; inflation can erode fixed streams.
Frequently Asked Questions
Fixed vs variable annuity?
Fixed pays a set amount; variable ties payments to market results.
Are annuities safe?
Backed by the insurer’s solvency and sometimes state guarantees, not the government.