An annuity is a retirement product that pays an income for a fixed period of time. You choose how long you want to receive the income, and whether you want it to start immediately or on a future date.
An annuity can be purchased with your savings or through an insurance company. The advantage of buying one is that it's tax-deferred, meaning that any earnings are not taxed as income until you withdraw them from the account. The disadvantage is that they're not as flexible as other investments.
You can also buy an annuity if you want to save up money for retirement, but don't have enough saved up to make a down payment on a house or other large purchase. An annuity lets you earn interest without putting money into an investment account first.
An annuity can be purchased with your savings or through an insurance company. The advantage of buying one is that it's tax-deferred, meaning that any earnings are not taxed as income until you withdraw them from the account. The disadvantage is that they're not as flexible as other investments.
You can also buy an annuity if you want to save up money for retirement, but don't have enough saved up to make a down payment on a house or other large purchase. An annuity lets you earn interest without putting money into an investment account first.
