How To Guide For: Understanding What An Annuity Is & How It Works

An annuity is a series of equal payments at regular intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments. Annuities are classified by the frequency of payment dates. The payments (deposits) may be made weekly, monthly, quarterly, yearly, or at any other interval of time. People most often use annuities to save money for retirement. Many people also use annuities to create an extra retirement income. There are several types of annuities. There is a savings annuity which allows your money to grow tax deferred over time and provide regular payouts during your retirement years. There is also an income annuity which uses your one time contribution to produce a regular income stream immediately. There is so much more to learn about annuities. To get a more in depth understanding of what an annuity is and how it works -- click the pictures below to read the articles.