While annuities can guarantee an income for risk-averse investors, they may play it too safe for others

People with annuities (annuitants) tend to skew older, with most approaching retirement age

However, others also invest in an annuity contract when they come into a large sum of money, like an inheritance. There are lots of myths surrounding annuities, such as the idea that they're only for the wealthy.

Some argue that annuities are particularly good options for women

Women live longer than men, meaning they’ll likely be retired for longer. Annuities can provide them with a guaranteed income stream during their retirement years, even if the rest of their retirement plan doesn’t last.

Annuities are financial products typically used by retirees looking for guaranteed income streams

Specifically, annuities are contracts between an individual and an insurance company that require the insurance company to make regular payments to the individual.

Annuities can help protect investors from outliving their retirement savings

While an annuity is also a contract between an individual and an insurance company, a life insurance policy differs in that it protects the beneficiaries in the event of the policyholder’s death.

Annuity owners are mainly middle-class people looking to supplement their savings

Gallup surveyed people who own annuities and found that annuity owners skew older and that the overwhelming majority bought the contracts to guarantee income during their retirement years. The annuity owners also said the contracts provide them with peace of mind.

Annuity sales have climbed, topping $430B in 2024, as retirees look to pad their income

Retirees are seeking guaranteed income that will last for as long as they live, weather market downturns, and preserve wealth.

Those over the age of 55 can buy an annuity with their pension savings

Annuity rates have risen in recent years, making them a more popular financial product, especially as people live longer. But buying an annuity isn’t a spur-of-the-moment decision.

An annuity income calculator

This interactive calculator lets users estimate how much money they can expect in their annuity payouts, depending on factors such as how much they invest and how long they expect to be paid. It also shows how the principal will deplete over time.

Investments into an annuity are typically locked up during the accumulation period

For one year, most annuitants won’t be able to withdraw any funds. After that, most contracts allow them to take out up to 10% of their accumulated total annually before fees—called surrender charges—are applied to their withdrawals.

If someone buys a $100K annuity, they may receive $525 to $1K monthly payments

In general, how much an annuity will pay out depends on a variety of factors, including how old an annuitant was when they bought it and what type of annuity they bought. Regardless, annuities can provide a guaranteed extra income for retirees.

Annuities are regulated at the state level

However, certain types of annuities, like indexed annuities, are also nationally regulated by the SEC and the Financial Industry Regulatory Authority to protect investors.

Annuities come in different types, such as immediate annuities and deferred annuities

Immediate annuities have no accumulation phase and go straight to the annuitization phase, whereas deferred annuities are set up to begin paying out at an agreed-upon date in the future. Annuities can also differ in how they accumulate value (fixed and variable annuities).

Annuitants have to pay income taxes on the annuity payments they receive, unless their annuities are folded into a Roth IRA

In most other cases, annuities grow tax-deferred until annuitants start to receive payments. Those payments are then taxed as regular income. Nonqualified annuities, which are bought with after-tax dollars, have different rules.

About 30% of financial advisors opted for fixed and indexed annuities in 2023

An infographic that shows the most common types of investments used by financial advisors with their clients in 2023 also found that nine in 10 advisors used ETFs, and three-quarters invested in cash and cash equivalents.

Expert says 90% of lottery winners take a lump sum vs. an annuity

However, a lawyer specializing in lotteries told CNBC that lottery winners should opt for an annuity instead. Lump sums are immediately slashed in half, and while both options are taxed, there are ways to minimize the taxes owed on annuity payouts.

Pension plans investing over 60% in stocks had the highest real returns in 2024

In order to ensure that retirees received all the retirement funds a company or other institution may have promised them, pensions were often limited to investing in run-of-the-mill assets like government securities, investment-grade bonds, and blue-chip stocks. But as market conditions have evolved, pensions are increasingly being invested in a wider range of assets, including alternative investments.

Cash balance pension plans provide the option of a lifetime annuity

Specifically, these defined-benefit plans are retirement plans that differ from traditional pensions in that they can come in one lump sum rather than in monthly payments. These plans are most popular among small business owners and their employees. Learn more about them in this article.

Retirement expectations versus reality

There's a big gap between what many Americans expect to happen during retirement and what actually happens—at least according to one financial planner. In this article, the financial planner in question explores how retirement expectations can differ from reality, exploring financial considerations such as how long people expect to work part-time during retirement, and more. Read the article here.

People often invest in alternative investments to diversify their portfolios

Because alternatives often have little correlation with traditional investments like stocks and bonds, adding them to a traditional portfolio can reduce its overall risk exposure.

An individual retirement account is a type of tax-advantaged investment account

An IRA lets individuals at most income levels invest either pre- or post-tax money for retirement. IRAs are often good solutions for people who don’t have the option to invest in a 401(k) plan—or for those who want to put even more money aside for retirement.

What 401(k) savers near retirement can do amid market volatility

If you're close to retirement, volatility in the stock market can feel scary. This guide for 401(k) savers has suggestions on what to do with your retirement accounts during uncertain times, based on how close you are to the age you'd like to retire.

The 401(k) is limited in its ability to provide guaranteed retirement income

Part of the problem is the high, often hidden fees associated with the accounts and a lack of access. Plus, analysts say the annual cost in tax revenue to the government is more than $100B.

Retail investors are not professionals—they invest their own money

For retail investors, the stakes may seem higher and more personal. Critics say that this dynamic means that retail investors are more susceptible to behavioral biases that could lead them to make poor decisions when it comes to buying and selling assets. For instance, fear of missing out could cause a retail investor to buy a stock that is popular but not a financially worthy investment.

CDs come with risks, such as penalties for early withdrawal and inflation

CDs are generally considered fairly safe investment options. A CD bought via a federally insured bank is insured up to $250K.

Some argue that a massive emergency fund can hurt more than it helps

A financial advisor makes the case for an emergency fund that isn't too overstuffed. An emergency fund that is too large, he argues, can mean that you'll miss other opportunities to grow your wealth.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Apeirophobia is an overwhelming fear of living forever, perhaps stemming from the brain's inability to conceptualize an infinite life.

US housing costs have risen by roughly 175% between 1991 and 2026—but a growing number of Gen Zers are becoming homeowners anyway. In 2025, 4% of homebuyers were Gen Z, up from 3% the year before.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

Warren Buffett's former professor Benjamin Graham is known as the 'father of value investing,' a strategy in which investors seek to buy stocks trading below their intrinsic worth.

Play the role of a student in a game where you try to navigate college and remain debt-free, selecting different income levels, high school experience, race, ethnicity, and more.

Some renewable energy sources may weaken the resiliency of electric grids by removing outage buffers provided by coal- and natural gas-fired plants, which provide the system with more time to find a new power source if a plant goes down.

20,000 letters to the advice columnist 'Dear Abby' provide insight into prevailing sex, religion, and LGBTQ fears, anxieties, and concerns from the 1950s onward.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

Indefinite cloning of some endangered species may not sustain their longevity because cloning success rates decrease as genetic mutations accumulate.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Hookworm infection, though risky, may help fight certain autoimmune conditions by tamping down the immune system's inflammatory response.

In 1939, baseball star Lou Gehrig delivered his inspirational 'Luckiest Man' speech after retiring due to the health condition that now bears his name.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

'Silent' fireworks have gained more interest in recent years as a quieter celebratory option.

Despite being favored by 87% of Americans, Congress does not have term limits.

Alzheimer's can lead to brain shrinkage, with an average of around 2% of volume reduction per year

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.

While atoms are normally made of protons, neutrons, and electrons, exotic ones have been built with antimatter—alternate versions of normal matter that live for fractions of a second and are about a billion times as rare.

Chaos theory—informally known as the butterfly effect—is the reason why weather forecasts are presented with probabilities rather than certainties.

To reduce wrinkles in clothing, research recommends gentle wash cycles with more water and tumble drying with smaller loads and longer times.

Prince's sexually explicit 1984 track 'Darling Nikki' attracted the ire of the Parents Music Resource Center, an advocacy group that inspired the Parental Advisory sticker, even though the song ends with a Christian message.

Louisiana's 'Cancer Alley' is infamous for having some of the highest industrial pollution, toxic air emissions, and cancer risks in the US.

Abraham Lincoln was almost assassinated weeks before his inauguration as he traveled from Illinois to DC through Baltimore in 1861; it took two independent claims for Lincoln to be convinced the threat was real