What's the point of an annuity? You just give them all your money and they give back a little bit at a time? Who would want to do that?

you could save and invest your own money all through your life. other people want to give money to an organization to help it grow...like the sierra club. that org has an annuity you can join. you could just buy government savings bonds. somethings they make available high yield savings bonds. then you could cash them in for your retirement.

Depends on the type they can be set up to give a steady income for life of a certian number of years. They can also be bought as a couple and with a guarntee pay off. Too many types and optins to go into here and they all come with a cost. One thing to remember is that they are backed by insurance companies so they are only as good as the company and that historically you can do better on your own if your are able to endure a higher risk.

There's a bit more to it than that. For starters no one says you give them all your money. Second, it's given back back with an investment return. They aren't always good deals but certain ones have their places at certain times.

I wouldn't want to do that but there are cases where it may be a good plan for certain situations. If you need a lifetime income and need to know for certain how much you'll get every month, it may be okay. However the variable annuities can't guarantee you anything as it is conditional on the stock market and also fattens the sellers commission.

An annuity can defer payments on income taxes. If your income falls into the next percentage of taxation just barely, it helps to put that money in an annuity. I have an annuity that I just keep and it will stay there until retirement. It makes a larger percent than other forms of saving plans. You can only be penalized if you take it out during a certain period. After you retire and make less money, then you can take that money out and pay less taxes.

There are many types of annuities and they have various uses.

Fixed annuities are familiar in many ways because of their use by many people as an alternative to CDs. They are low-risk, and have crediting (interest) rates similar to CDs. The attraction for some (especially older) people is that the interest accrues tax-deferred, and in the event of death the proceeds (of any annuity) bypass probate and are paid directly to a named beneficiary without any legal involvement. Of course, any annuity may be converted to a stream of income that one cannot outlive. No other investment offers this guarantee.

Variable Annuities have come under fire in recent years by lots of attackers. Let's just say that nothing is ever black and white. Some VAs do have features that stink out loud. However, most offer features that make them good investments, for the right person in their particular situation. For example, even though they are tied to market-based crediting mechanisms, many of them offer a feature that returns all of the paid-in value at death, even if the actual account value had fallen drastically due to market declines. Some newer VAs guarantee payments for life or a given period at a stated rate without annuitizing the contract. VAs are complex contracts and should be explained thoroughly and carefully by a registered representative of a good issuing company.

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