An annuity is a financial instrument that pays you an income for the rest of your life. The payment amount, frequency, and other features depend on what type of annuity you invest in. Annuities are often used to generate retirement income or to supplement pension benefits at work. This quick guide will help explain how annuities work and provide some tips for investing in them wisely.
Which Of The Following Most Accurately Describes An Annuity?
Annuities are most accurately described as a stream of equal cash payments made at equal time intervals.
What else is an annuity best described as?
- long-term savings account
- an alternative to certificates of deposit
- an insurance policy for retirement
- a lifetime income provider to a retiree
- an automated money manager during retirement
- long-term care insurance
- life insurance alternative
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Frequently Asked Questions
Which statement best describes lifetime income?
The total salary and retirement benefits for all the years worked.