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Annuities
And Individual Retirement Accounts

Individual Annuities

The vast majority of workers who retire
today receive Social security retirement benefits.
Some workers also receive benefits from their
employer’s retirement plans. Individual annuities
can also be purchased to provide additional
retirement income.

- Annuity principle

An annuity can be defined as a periodic
payment that continues for a fixed period or for
the duration of a designated life or lives. The
person who receives the periodic payments or
whose life governs the duration of payment is
known as the annuitant.

An annuity is the opposite of life insurance.
Life insurance creates an immediate estate and
provides protection against dying too soon
before financial assets can be accumulated. In
contrast, an annuity provides protection against
living too long and exhausting ones savings
while the individual is still alive. Thus, the
fundamental purpose of an annuity is to provide

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