A contract that pays you income at regular intervals, typically monthly, in exchange for an upfront payment. The income can start right away, or at some set date in the future. Annuities are often used to provide retirement income.
The different types of annuities include:
- a life annuity, which makes payments for as long as you live.
- a "joint life annuity" could make payments for as long as either you or your spouse lives.
- an annuity certain, which makes payments for a specified number of years or to a specified age, regardless of whether you are alive throughout that period.
- some combination of both.