An annuity is a contract between an individual and an insurer that provides a stream of payouts to the purchaser in return for the premium paid. According to the Annuity Museum, annuities date back more than 2,000 years, to ancient Rome.
Today’s retiree can choose from several different annuities that offer specific benefits like immediate or deferred income, asset growth potential, tax deferral and a variety of payout options. Regardless of type, all annuities share the ability to create a stream of income payouts for as long as the owner (also known as the annuitant) lives, or for a period the annuitant chooses. In some instances, this income can supplement a pension or Social Security benefit.
Annuities can be a helpful tool for people who are worried about outliving their income or who have maxed out contribution limits to tax-qualified retirement savings vehicles. They can also help address retirement concerns like longevity, inflation and market risk.
With fewer companies offering traditional pension plans than in previous generations and Social Security facing an uncertain future, what will the landscape look like for current or future retirees? Unlike most other retirement savings products, annuities promise to provide income for as long as the owner lives, making them one of the only investments that can provide income that can last a lifetime.
Visit kofc.org/familyfinance for more information, including important disclosures.
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TIMOTHY WOZNIAK is the director of product development and sales for Knights of Columbus and a member of St. Jude Council 4333 in Peoria, Ill.








