In investment, an annuity is a series of payments made at equal intervals. Examples of annuities are regular deposits to a savings account, monthly home mortgage payments, monthly insurance payments and pension payments. Annuities can be classified by the frequency of payment dates. The payments may be made weekly, monthly, quarterly, yearly, or at any other regular interval of time.

Annuities are simply a series of payment made by you either weekly, monthly, quarterly, annually or any other intervals specified in advance to save money with higher interest accumulated than one would get in a savings account.

The intent is to collect regularly during retirement phase. This is often recognized after 59 and half. Let’s just say 60 for simplicity. A lump some can be invested as well. In most cases the rate is slightly higher than a CD also know as Certificate of Deposit offered at you local banks. You can either collect immediately or a designated time in the future. Depending on the initial investment by you the collection of regular payments can vary. It is a common practice for many to collect at a later time in the future.

There are three different types of annuities. Fixed (fixed interest rate), Variable ( variable interest rate) and indexed (Example: S&P 500). As you may have already suspected, some have a certain levels of risk associated with and some have a safety net as a fixed baseline preventing your money from losing value below a designated point predetermined. Your professional broker will aid you with making the best decision for the criteria you have set forth before them.