How Do Annuities Work?
Annuities come in several forms, including fixed, variable, and indexed. They generally work in two phases: the accumulation phase, where you pay into the annuity, and the annuitization phase, where the insurance company starts making payments to you.
This calculator can help you estimate either the future value of your contributions or the regular payout you can expect in retirement.
Types of Annuities
- Fixed Annuity: Guarantees a minimum rate of interest and a fixed amount of periodic payments.
- Variable Annuity: Allows you to choose from a selection of investments, which can lead to higher returns but also higher risk.
- Indexed Annuity: Combines features of both, with a minimum return and potential for more based on a market index.