An annuity is a financial contract written by an insurance company that provides for a series of guaranteed payments, either for a specific period of time or for the lifetime of one or more individuals. Although an annuity is essentially a life insurance product, there are important differences between the two. For example, under the terms of a life insurance policy the insurer will generally make a payment upon the death of the insured. Under the terms of an annuity, however, the insurance company makes its payments during the lifetime of the individual. In addition, unless the annuity contract specifies a beneficiary, most annuity payments cease upon the death of the recipient.

Investors purchase annuities for many reasons, the most common being the tax deferral of earnings and the guarantee of a lifelong annual income. Annuities have become much more attractive investment options for retirement savings in recent years. This has been due in large part to innovation within the industry, as providers have introduced reasonably priced products with greater flexibility, as well as a variety of investment options.

The Key Benefits of Annuities include:
-- Earnings grow tax-deferred until withdrawal.
-- Annuity holders receive a specified amount of annual income during retirement.
-- Investors are allowed to switch between investments in their annuity tax-free.
-- Investors can contribute as much as they want during the accumulation phase of an annuity.

Because of the various needs and motivations of annuity holders, insurance companies have developed a wide variety of flexibility and variation in annuity contracts. Below you will find a brief analysis of some of the options available to you.

Immediate Annuities are usually purchased at retirement age, with benefits that begin immediately (within one year of purchase).

Deferred Annuities offer benefit payments that begin at some future date. Interest usually accrues on a tax-deferred basis in the interim.

Annuities are also classified as either “Qualified” or “Non-Qualified” based on the type of funds that an investor uses to purchase the annuity contract (or to contribute to it).

Qualified Annuities are annuities that an investor funds with either pre-tax dollars or tax-deductible contributions.

Non-Qualified Annuities are those contracts funded with after-tax dollars.

Annuities may also be Fixed or Variable.

A Fixed Annuity is a personal retirement account in which the earnings are based on a fixed rate set by the insurance company. Fixed annuities are susceptible to inflation risk due to the fact that there is no adjustment provided for runaway inflation.

A Variable Annuity is a personal retirement account in which the investment grows tax-deferred until the investor is ready to withdraw the assets. Unlike an IRA, there are no restrictions on the amount of the annual investment. In addition, variable annuities offer the potential for greater returns and the opportunity for the investor to make his/her own decisions regarding how the assets are invested. Another important feature of the variable annuity is the family protection, or death benefit, that often comes along with such contracts. This guarantees that, should the investor die during the accumulation phase of the variable annuity, the account owner’s beneficiary will receive at least the amount of the investor’s contributions minus withdrawals, or the current market value of the account.

Who Cares What the Market is Doing When You're Pulling in $28,900 a Year in Dividends? With the safe, growing, high-yield picks that Editor Carla Pasternak recommends every month you don't have to worry whether or not the market has bottomed. You can sit back and collect annual dividend paychecks of $16,300, $19,900 or even $28,900! You can't go wrong looking into Carla's recommendations. A year from now, when you've collected as much as $28,900 from dividends alone you'll be glad you did. Take the first step and, read this report now. Seven "Yield Doubler" Stocks That Are Clobbering The Dow Just 12 trading days before the market hit its 6,500-point low this year, the "Yield Doublers" portfolio was born. That was almost 4 months ago. The Dow has rebounded +12% since then -- but our seven "Yield Doublers" have clobbered that figure by a factor of up to 9-to-1... delivering up to +144.2% gains to boot! Go here to see why you should add these "Yield Doublers" to your portfolio today.

We're Putting $50,000 on the Line in Our NEW Stock of the Month Portfolio We're SO confident in this strategy that we're putting our money where our mouth is... $50,000 worth of it in fact! That's how much we've put into a brokerage account to fund the real-money portfolio for StreetAuthority Stock of the Month. Amy Calistri just made her first purchase, and it's not too late for you to join in and follow along with everything she does. Don't be left on the sidelines, click here to learn more now. Two Infrastructure Stocks That Are Profiting From Massive Government Spending Since the stimulus package was signed into law on February 17th, these two infrastructure picks have moved up quickly. One's a worldwide construction company that's already gained +32% to date. The other makes critical copper, aluminum and fiber optic cables... and shot up +41% in a matter of just weeks. Both are headed higher. You’ll find their names in this special report.