What is an Annuity?
An annuity is a long-term financial agreement between an individual and an insurance company, designed to provide a consistent income stream after retirement. It helps secure a stable financial future and can be purchased independently or through an employer.
Types of Annuities:
Immediate Annuity: The individual makes a lump-sum payment or smaller contributions, and the insurance company starts disbursing payments almost immediately or within a short time frame.
Deferred Annuity: Payments begin at a specified future date. Deferred annuities offer flexible timelines, allowing individuals to select plans that start payments 15 or 25 years later, continuing for their lifetime.
Qualified Employee Annuity: Employees may access annuities through their employer's qualified annuity programs, where the employer provides specific annuity benefits as part of their plan.