Annuity
An insurance contract that pays a stream of income, often for the rest of your life.
An annuity is a product, usually sold by an insurance company, in which you pay a lump sum or series of payments in exchange for guaranteed income later. Annuities can provide certainty in retirement but often carry fees and complexity, so they should be understood carefully.
Examples
- A retiree might buy an annuity to guarantee a fixed monthly income for life.