An annuity is a financial product that provides a regular stream of income over a specified period of time or for the lifetime of the annuity holder. It is typically purchased from an insurance company, and can be structured in different ways, such as a fixed annuity or a variable annuity.
There are several reasons why someone might choose to get an annuity. One reason is to ensure a steady income stream during retirement, when other sources of income may be limited or uncertain. An annuity can provide a reliable source of income that is not subject to market fluctuations, and can help retirees meet their ongoing expenses.
Another reason to get an annuity is to plan for the future and manage financial risk. By investing in an annuity, individuals can ensure a guaranteed stream of income that can help them meet their financial goals and obligations, such as paying for college tuition or funding a long-term care plan.
Finally, some people choose to get an annuity as a way to pass on wealth to their heirs. An annuity can be structured to provide ongoing income to beneficiaries after the annuity holder's death, which can help ensure the financial security of their loved ones.