Annuities vary in terms of how money is paid into the annuity, how money is withdrawn from the annuity, and how the funds are invested within the annuity.
A variety of annuity types are available to you, including:

• Deferred annuities—with a deferred annuity, payouts begin many years after the annuity is issued, thus it is 'deferred'. Investors can choose to receive their money as a lump sum or in scheduled payments.
• Fixed annuities—with a fixed annuity, your funds are invested in conservative, fixed-income investment vehicles such as bonds. The principal is guaranteed, but the interest rate is also guaranteed for a minimum period. The guaranteed interest rate is adjusted (either up or down) at the end of the guaranteed period. Fixed annuities are considered low-risk investment options and their growth is also relatively low. Fixed annuity investors benefit if interest rates fall, but not as much if they rise.
• Immediate annuities—with an immediate annuity, an immediate income stream is established. It is usually funded with a single premium, and usually purchased by retires with funds they have accumulated or received for retirement. There are, however, risks to retirees using an immediate annuity because unlike other investments, the balance is not transferable to your heirs (although survivor options so exist to protect spouses or refund the principal to  beneficiaries). Plus, the interest rate is fixed when you purchase the annuity, which may mean you've locked yourself into lower rates.
• Variable annuities—with a variable annuity, the income payments vary based on the performance of the underlying investments. This type of annuity is designed to offset the effects of inflation and are subject to fluctuating market risk and returns. Early withdrawals are subject to penalties and fees, and are fully taxable.

Annuities provide a useful investment strategy for many investors, but discuss your options with your Obsidian Financial Group advisor to determine which is right for your needs. The advisors at Obsidian Financial Group have over 100 years investment and planning expertise.