Most of us have heard of annuities, but few understand how they work. Annuities can be a powerful addition to a retirement plan. In short, they can protect your savings while also providing you with higher-than-average rates of return.
An annuity is a contract between you and an insurance company where you make payments through a lump sum or contributions in exchange for future income. The insurance company invests these funds for you throughout the accumulation phase where they grow tax-deferred.
