In general terms, annuities allow you to accumulate tax-deferred funds for retirement and then receive a guaranteed income.  This guaranteed income is payable for life or for a specified period of time: generally a term of five or ten years.  Annuities are offered by insurance companies and sold through licensed agents.  Be sure to find a licensed agent to assist you with your annuity questions. 

Some information regarding Variable Annuities:

1.  Variable annuities allow the investor to invest their annuity premium in any way they determine.

2. The insurance company does not share in profits of investments OR protect losses.  That is a key consideration, this annuity is not protected against losses.

3.  Variable annuities carry the same kind of risks as individual stocks, bonds or mutual funds. So you keep your gains, but also suffer your losses.

4.  Variable annuities afford flexibility, allowing investors to invest across a wide array of securities: bonds, mutual funds, stocks, futures, and more.

5.  Variable annuities are ideal for the more aggressive investor who also wants to manage the investment with more flexibility.

Find an insurance company and/or licensed agent to help you better understand these variables and determine which type of annuity is best for your financial future and needs.  For example, the fixed-rate annuity is ideal if you want to have the security of a guaranteed interest rate.  However, the variable-rate annuity is preferable if you want to increase your gains as the market potentially grows.