Some of the benefits of annuities are, first, the earnings on your contributions compound tax-deferred until you receive payments. Second, the money is invested in a professionally managed portfolio with professionals who should be able to obtain a better return on your money than you can as an individual. Third, the annuitant can terminate (surrender) the annuity any time he wants (taxes will have to be paid at that time on the earnings). Fourth, the annuitant can choose the age at which the payout will begin. Fifth, there are several good options for paying into the annuity. Sixth, there are several good options for receiving the settlement of the annuity.

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Last modified: January 20, 2001