When you come late to the investment game and you want to make sure you have some money for retirement, you might want to consider annuities. There are actually four main types of annuities, each with their own benefits and drawbacks. The following information will help you determine if annuities should be part of your financial planning and if so, which type you you may want to invest in (over the other types available).
Immediate annuities are an excellent source of investment income because you see almost an immediate return and payment the minute you invest in them. If you suddenly find yourself short on cash and close to retirement or in the midst of retirement and you somehow lost all you had, immediate annuities can help you regain some of what you lost so that you have money to live on until you can build up your nest egg (or build it up again, as the case may be). There may be some investment broker's fees attached to immediate annuities, but the quick cash flow still beats waiting around for other investment types to mature.
Deferred annuities are ideal if you have several years to accumulate wealth before retiring. The money you put into a deferred annuity gains interest and is paid out in one lump sum at an appointed time and date in the future. The nice feature about deferred annuities is that if you suddenly find yourself in need of the cash you put into them, you can convert a deferred annuity into an immediate annuity and begin to receive payments from that account.
Fixed annuities pay out one fixed lump sum. They are guaranteed to be "x" amount of dollars paid on such-and-such a date. You know exactly what you are getting in terms of cash and exactly when it will be paid. And if you organize it ahead of time, you can even have the amount direct-deposited into your checking or savings account rather than waiting for a check to arrive.
Variable annuities are any annuity product that accumulates interest based on how well the annuity market is doing overall. These are probably some of the riskiest investments, since you need a financial planner who can accurately forecast how the market will behave several years from now based on current market trends. If you still want to take some risks and invest in variable annuities, it is best to invest in them for the short-term gains, and only when the market is "bullish" (i.e., doing really well at the moment).