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[quote=Anonymous][quote=Anonymous]An annuity is simply a contract you enter with a company. The company is usually a financial institution. Basically, you give the company $XXXX number of dollars today. In return for your money, they promise to pay you an annual payment (i.e., an "annuity") from a certain date (usually retirement age, like 65 or 70) until you die. For your perspective, this gives you a guaranteed payment from a reputable financial company until you die and from your perspective takes away the trouble of managing your own investments and dealing with ups and downs in the market: you get a simple annual, guaranteed payment. From the company's perspective, they think they can make more on the money you give them than what they promise to pay you.

The problem with annuities and their bad rep is that the come often with fees and complexities that are not clear to people. So they don't end up necessarily getting a better deal than if they kept the money themselves. Also, there is a risk that the company will not perform their promise. So the word recently is to be very wary of annuities and make sure you understand them and do your homework.[/quote]

Simple immediate payment annuities, from companies with very strong ratings (Quinn recommends TIAA or Vangyard) are the ones to consider. [/quote]

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