What Is an Annuity and How Does It Work?

An annuity is an insurance product designed to help address certain retirement income or protection goals.

Some annuities focus on generating income, while others emphasize principal protection or growth opportunities tied to market indexes.

Different annuity types have different structures, features, fees, surrender periods, and limitations.

Annuities are not one size fits all and may or may not fit depending on an individual’s goals and financial situation.

Understanding how annuities work is an important part of making informed retirement planning decisions.