Many things in life are uncertain, and retirement is no exception. With longer life spans and unpredictable economic factors, investors are looking for ways to stretch their retirement dollars. Annuities may be one way to help provide you with a steady stream of income during your retirement years. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers the following information to help you decide if an annuity is the right option for you.
What Is an annuity?
An annuity is a contract between you and an insurance company that entitles you to a set amount of money for a period of time immediately or at some point in the future. If payments are to start immediately, you have an immediate annuity. If payments are delayed until some possible future date, you have a deferred annuity. Some annuities are funded with a single payment (called a premium), while others can be funded with many payments and over a long period of time.
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