An annuity is a contract with a life insurance company. Annuities are most commonly used to generate retirement income. Here are some key benefits of buying an annuity.
4 key benefits
1. Guaranteed income for life
When you deposit a lump sum of money to buy an annuity, the life insurance company agrees to pay you a guaranteed income for the rest of your life. You'll never run out of income — no matter how long you live.
2. Peace of mind
Once you buy an annuity, you don’t need to make any further investment decisions about the money you’ve deposited. And you know exactly how much you’re going to receive every month in income.
3. Options to suit your needs
When you buy an annuity, you can add a number of options. For example, if you're married, you can add an option that guarantees the annuity payments will continue for as long as either you or your spouse lives. Learn more about annuity options.
4. Meet other financial planning goals
You can use an annuity for other financial planning goals like providing money for your beneficiaries or estate, or leaving a gift to charity. For example, an insured annuity gives you a steady stream of income during your lifetime and pays your beneficiaries a lump-sum amount at your death. Learn more about using annuities for other financial planning goals.
Warning: Once you buy an annuity, you can’t get your savings out. And your annuity payments are locked in. You can’t change them for any reason.
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