Annuity
An annuity is a contract with an insurer that turns a lump sum into a stream of income, often for life. Its appeal is guaranteed income you can't outlive; its drawbacks are fees, complexity, and giving up access to the money, so the details matter enormously.
The category spans products with almost nothing in common. A single-premium immediate annuity is simple and comparable: you hand over a sum, an insurer pays a stated income for life, and you can shop the quote between companies as you would a mortgage rate. Variable and indexed annuities are a different proposition — layered fees, surrender charges lasting years, and caps or participation rates that limit the returns the marketing implies. The need being met is longevity risk, the possibility of outliving your money, and there is a cheaper way to buy some of it first: delaying Social Security raises a guaranteed, inflation-adjusted income by roughly 8% for each year deferred past full retirement age.
Put it to work
Annuity Payout Calculator
See what a lump sum pays out each month if drawn down evenly over a fixed period, and how much of the total comes from interest rather than principal.
Retirement Calculator
Project your retirement savings: what your balance could reach by retirement age and the monthly income it could sustainably provide.
How Long Will My Savings Last?
See how long your savings last when you withdraw a fixed amount each month while the balance keeps earning a return — and whether it ever runs out.