What is an Annuity?

An annuity is an equal distribution of payments made over an agreed period of time. It is
typically used by investors to delay the payment of income taxes on income or save tax
deferred. Annuities can also help replace a paycheck in retirement. There are two main types of
annuities including variable annuities and income annuities. Variable annuities can help you
build a long-term nest egg which offers deferred taxes on earnings until withdrawn, the ability to
pass assists to beneficiaries and receive payments. An income annuity provides guaranteed
income in retirement which can give you flexibility to choose the amount of income you need
when you’d like your income to begin.

You may wonder what are good reasons for selling an annuity? Some reasons may include
choosing an investment with higher returns, putting money towards a small business, unable to
afford the annuity fees or just needed immediate access to liquidity. There are many options
with selling your annuity including selling some of your payments, selling a portion or each
payment or selling all of your payments. Payments to your annuity can be made by an electronic
transfer of funds or a physical check, your lump sum will allow you to use the money when you
need it.