What is an Equivalent Annual Annuity and How Does it Work?

Shawn Plummer

CEO, The Annuity Expert

An equivalent annual annuity is a sum paid to you each year for a certain number of years. It is essentially an annuity payment plan, where you receive the same amount each year. This can be an excellent option for people looking for a steady income stream in retirement. This guide will discuss how equivalent annual annuities work and some of their benefits!

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What is an Equivalent Annual Annuity?

An equivalent annual annuity is an annuity payment plan where you receive the same amount each year. This can be an excellent option for people looking for a steady income stream in retirement.

With an equivalent annual annuity, you will know exactly how much money you will receive each year, which can help to budget and plan for your retirement.

Equivalent Annual Annuities

The Benefits

An equivalent annual annuity can be an excellent option for people looking for a steady income stream in retirement. There are a few benefits that this type of annuity offers:

  • You will receive the same amount each year, which can help you budget and plan for your expenses.
  • This type of annuity can provide you with a source of income that is not subject to market volatility.
  • An equivalent annual annuity can be a great way to supplement your other retirement income sources.

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What Is An Equivalent Annual Annuity

The Drawbacks

There are a few drawbacks to equivalent annual annuities that you should be aware of:

  • First, you will not receive additional money if the market performs well.
  • If you live longer than expected, you may outlive your annuity payments.
What Are Equivalent Annual Annuities

Bottom Line

If you are nearing retirement and looking for a steady income stream, an equivalent annual annuity may be the perfect option for you. Contact us today to get started on your quote and see how much money you could receive each year in retirement. We think you’ll be surprised at how affordable this type of plan can be. Thanks for reading!

Equivalent Annual Annuity

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Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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