In exchange for a single lump sum investment, an insurer makes guaranteed regular income payments to an investor that contain both interest and a return of principal. Annuity payments can continue for the lifetime(s) of one or two people, or for a chosen period of time.
Annuities can be ideal for investors who:
Want the highest guaranteed income amount possible from their investment
Wish to help cover essential expenses in retirement
Are concerned about outliving their savings
Wish to minimize tax on their investment income
Value security and peace of mind while reducing the need for ongoing investment decisions
Want to subsidize early retirement income
Need income until pension and government benefits become available