Annuities Offer Predictable Income Stream as One Component of Retirement Planning
Annuities are financial products, typically purchased from insurance companies, designed to provide principal-protected accumulation and structured payments, thereby adding predictability to a portion of retirement income. Unlike a 401(k) or IRA, which are retirement accounts, an annuity is a contract that can offer payments for a set period or for life, either starting soon after purchase or at a future date. Nate DeBoer, vice president and actuary at Mutual of Omaha, emphasizes that annuities are not full retirement plans but rather tools that fit into a broader retirement strategy. Many retirees expect to have multiple income sources, including Social Security, 401(k)s, IRAs, and personal savings, and annuities can complement these by providing a scheduled payment stream, similar to a paycheck. 
