The Appeal of Annuities An annuity is a contract with an insurance company in which the contract owner agrees to make one or more payments to the insurance company in exchange for a future income stream. A fixed annuity guarantees a set rate of return during the life of the contract, potentially offering some relief for retirees who worry about the possibility of outliving their assets. Typically, annuity owners may choose to receive payouts as a lifetime income, an income that lasts for the lifetimes of two people, or an income that lasts for a specific number of years. A variable annuity offers the potential for growth through market participation. The contract owner can invest the premiums among a variety of investment options, or “subaccounts,” according to his or her risk tolerance, long-term goals, and time horizon. Most contracts offer a range of stock, balanced, bond, and money market subaccounts, as well as a fixed account that pays a fixed rate of interest. The future value of the annuity and the amount of income available in retirement are determined by the performance of these selected subaccounts. An annuity may be funded with a lump sum or a series of premium payments. Although an annuity is typically purchased with after-tax dollars, any earnings are tax deferred until withdrawn, subject to certain limitations. Variable annuities are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.