What are annuities?
An annuity is a contract that usually requires you to pay a series of premiums in exchange for future income.
Why should someone buy an annuity?
In the early 1980s, about 85 percent of private-sector employees with pension coverage had Defined Benefits (DB) plan, which typically provides the employee and his or her spouse with a guaranteed lifetime monthly retirement income. By 2015, only 3 percent of Fortune 500 employers offered traditional DB plans to newly hired employees. Today, most of the new employees have 401(K), of which the funds might run out when the employee is still alive, i.e. the risk of outliving savings. Annuities, particularly fixed annuities, provide a guaranteed stream of income for a specific period or for the rest of your life.