Annuities come in several types, each catering to different financial needs and preferences. Immediate Annuities start paying out almost right away after you make a lump sum payment. They are beneficial if you need immediate income, such as when you retire. However, they typically offer lower returns compared to other types, and once the payments begin, they are fixed and cannot be changed.

Deferred Annuities delay payments until a future date, allowing your investment to grow over time. They include Fixed Deferred Annuities, which provide regular, guaranteed payments with a fixed interest rate, offering stability but usually with lower returns compared to other types. Variable Deferred Annuities have payments that vary based on investments you choose, such as mutual funds. They come with the potential for higher returns but also involve higher risk and fees. Indexed Deferred Annuities link returns to a market index like the S&P 500, providing potential for higher returns while offering some protection against market losses.

Qualified Annuities are funded with pre-tax dollars from retirement accounts like IRAs or 401(k)s, with taxes paid upon withdrawal. In contrast, Non-Qualified Annuities are funded with after-tax dollars, meaning only the earnings are taxed when you withdraw the funds. Fixed Annuities offer regular, guaranteed payments with a fixed interest rate, providing predictable and stable income but generally offer lower returns compared to variable or indexed options.

Variable Annuities have payments that depend on the performance of investments chosen by the holder, which can lead to higher returns but also involves greater risk and higher fees. Indexed Annuities offer returns based on a market index but provide some protection against market losses, presenting a balance between potential gains and risk.