Deferred annuities are insurance contracts that provide regular payments or a lump sum in the future. Unlike immediate annuities, which start paying right away, deferred annuities have two phases: an accumulation phase where you put money in and it grows tax-free, and a payout phase where you receive income.
When buying an annuity, consider your retirement income needs, risk tolerance, and how long you can leave money in the annuity.
Look for flexibility in premium payments and withdrawal options. Start by checking the financial strength of the insurance company, as well as any fees, surrender charges, or early withdrawal penalties. Also, think about whether you want additional features like death benefits or inflation protection.
Remember that annuities are long-term contracts, so make sure you won't need the money for other purposes in the near future.
