An annuity is an insurance contract paying a stream of income, often for life — designed to provide retirement income certainty. Types: immediate annuities (lump sum → income now), deferred annuities (grow tax-deferred → income later), fixed (guaranteed rate), variable (invested in markets), indexed (returns linked to index with caps). Annuities provide longevity insurance — the income continues no matter how long you live. Costs: high fees (often 1.5-3% annually), surrender charges, complex contracts. SPIAs (Single Premium Immediate Annuities) are the cleanest form. Annuities suit retirees worried about outliving savings; for accumulation, tax-advantaged investing typically beats variable annuities after fees.
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403(b)
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457(b)
A 457(b) plan is a retirement plan for state and local government employees and certain nonprofit employees. Unique…
Annuitization
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The Backdoor Roth Conversion strategy enables high earners who exceed Roth IRA income limits to fund a Roth…
Beneficiary IRA
A Beneficiary IRA (Inherited IRA) is a retirement account inherited from a deceased owner. Post-SECURE Act 2019, most…
Bucket Strategy
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Annuity
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
403(b)
A 403(b) plan is a retirement plan for employees of public schools, nonprofit hospitals, charities, and religious organizations…
457(b)
A 457(b) plan is a retirement plan for state and local government employees and certain nonprofit employees. Unique…
Annuitization
Annuitization is the process of converting a lump sum (or accumulated annuity value) into a guaranteed income stream,…
Backdoor Roth Conversion
The Backdoor Roth Conversion strategy enables high earners who exceed Roth IRA income limits to fund a Roth…
Beneficiary IRA
A Beneficiary IRA (Inherited IRA) is a retirement account inherited from a deceased owner. Post-SECURE Act 2019, most…
Bucket Strategy
The bucket strategy is a retirement withdrawal approach that segregates assets by time horizon into 'buckets': Bucket 1…
