Retirement Annuity

What Does Retirement Annuity Mean?

A retirement annuity is a financial product designed to help individuals prepare for retirement. During the accumulation phase, individuals make payments into the annuity. Once the policyholder reaches a specified age, the annuity disburses funds according to a predetermined schedule.

Many life insurance companies offer retirement annuities as part of their policy benefits. Several carriers that appear on lists of the best life insurance companies for seniors also sell annuity products, since both lines serve customers planning for retirement.

Insuranceopedia Explains Retirement Annuity

The purpose of a retirement annuity is to provide a steady income during a person’s later years, when they are no longer working.

Retirement annuities can also offer certain tax advantages, which makes them a popular investment option. They are one of several annuity types; others begin paying out immediately after purchase rather than waiting until retirement age.

Retirement annuities are similar to retirement accounts, and both are often referred to as IRAs, which stand for “individual retirement annuity” and “individual retirement account,” respectively.