Annuities can prove to be a valuable element in funding your retirement plans. An annuity is basically a contract for which you make an up-front payment. In return, the company selling the annuity promises to pay you regular payments in the future. But you must know how annuities function and what their key features are.
Things You'll Need
Start shopping. Insurance companies, banks, brokerage houses, mutual-fund companies, and even nonprofit organizations all sell annuities.
Learn the two basic kinds of annuities and how they differ.
A fixed annuity guarantees you a certain future payment. This is a good option only for very, very conservative investors. The rate of return on your money is low, and annuities use actuarial tables based on a person living to be 100.