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In general, an annuity is thought of as a source of income that is received beyond the days when you stop working. In that sense, it can be considered as retirement income. Basically it's another way to ensure that you are provided for in the future. For anyone who fears that their poor spending habits will cause them to steamroll through their savings over a relatively short timeframe have the option of spreading their retirement annuity out over the rest of their life, ensuring that they will always have a source of income. When thought of in this manner, a retirement annuity is not too different from a pension.
A retirement annuity is often thought of as an individual's own portable pension fund with the exception that the relationship between employee/employer (As in the case of pension fund) doesn't exist. Although recipients are free to choose the rate at which they contribute to the fund, there is a minimum level of contribution that must be met in order to qualify. The timeframe over which the retirement annuity payments are spread out is also considered to be flexible, allowing for a lump sum annuity payment if it were your choice.
A retirement annuity holder cannot access their policy until they are in fact retired (Between the ages of 55 & 70) or suffer through the unfortunate ness of disability or death.
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Continue reading more about other ANNUITY TYPES
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