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A deferred annuity is a contract between an individual and an annuity seller. It allows a person to save tax-deferred and receive income at a future date.
A variable annuity is a contract between a buyer and a seller, sold mainly by insurance companies. Unlike other annuities, variable annuities are considered securities.
Fixed annuities offer investors the security of a locked-in interest rate and the protection of their premium. They can play a key role in retirement planning.
Annuities are similar to individual retirement plans in that bought by people who are planning for retirement and want a regular source of income after they stop working.
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