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Glossary · retirement

What is Annuity?

An insurance product that converts a lump sum into a stream of income payments.

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Annuities come in many varieties: immediate, deferred, fixed, variable, indexed. All share the core idea of trading a lump sum today for future income — often for life.

Simple immediate annuities are among the few ways to insure against outliving your money. Complex annuity products often carry high fees and surrender charges; read the prospectus carefully and compare to simpler alternatives.

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Frequently asked questions

Are annuities a good investment?

Simple immediate annuities can be excellent longevity insurance. Complex variable and indexed annuities often carry high fees that erode the value; look hard before committing.

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