An Annuity is a financial product or retirement plan feature that provides a stream of payments to an employee over time, typically purchased or offered as part of a pension or insurance plan.
- What is an annuity?
Answer: It is a financial product providing regular payments to an employee, often as part of a retirement plan. - How does an annuity work in retirement planning?
Answer: It converts savings into a steady income stream, often for life or a set period. - What are the types of annuities?
Answer: Types include fixed, variable, and indexed annuities, each with different risk and return profiles. - What are the benefits of an annuity for employees?
Answer: It offers financial security and predictable income during retirement. - What are the potential drawbacks of an annuity?
Answer: Drawbacks include high fees, limited liquidity, and tax implications.
