Annuities are known for their periodic payments, which can be immediate or deferred. Immediate annuities start making payments shortly after a lump sum is invested, while deferred annuities accumulate funds for a specific period before making payments.

Annuities are funded either with a single lump-sum payment or a series of contributions over time. The money you invest is called the principal, and it can grow over time through interest or investment gains, depending on the type of annuity.

Many annuities offer tax-deferred growth, meaning the earnings on your contributions are not taxed until you withdraw them. This can be advantageous for retirement planning as it allows your money to grow more quickly.

Annuities offer different income options, such as fixed, variable, and indexed.

Provide a guaranteed fixed interest rate, ensuring a stable and predictable income stream.

Allow you to invest in a variety of investment options, such as stocks and bonds. Your income depends on the performance of these investments and can fluctuate.

Offer returns tied to the performance of a specific market index, providing the potential for higher returns than fixed annuities with some downside protection.

You can choose the payout period for your annuity, which can be for a specific number of years, your lifetime, or the lifetime of you and your spouse.

Annuities are typically long-term commitments, and early withdrawals may result in surrender charges and tax penalties. However, some annuities offer partial withdrawals or riders that provide more liquidity.

Many annuities include a death benefit, which guarantees that a beneficiary will receive at least the amount invested in the annuity if the annuitant passes away before receiving the full payout.

Annuities can come with fees, including management fees, administrative fees, and surrender charges. It's essential to understand these costs before purchasing an annuity.