# 🍏 Annuity

**Published by:** [Let Them Eat Cake](https://paragraph.com/@ltecake/)
**Published on:** 2022-06-21
**URL:** https://paragraph.com/@ltecake/annuity

## Content

TL,DR: Like applesauce, a way of spoon feeding products to the elderly Annuity / Homemade Applesaucerequires an upfront investment to fund the producteventually used to spoon-feed your grandparentsEatamology “Annuity” is a derivative of the latin word for “year”, named after the yearly payments received by annuity holders during the pay-out period. Financials Annuities are financial products for retirees and the elderly, which brings to mind applesauce, a healthy and palatable mush. To set receive money from an annuity, you must first deposit money into the product, which happens during the “pay-in” period. This involves a series of upfront payments to the annuity provider, typically an insurance company, who will bundle the payments with other contributions and make large long term investments. During the pay-out period, the provider sends yearly payments to the product holders for the remainder of their lifetime. Contracts can be fixed, meaning the value of each annual payment remains static, even if the underlying investments do extremely well or extremely poorly. Contracts can also be variable, in which case the size of annual payments depends on the investment performance. Early Withdrawal Like taking too big of a bite and spilling applesauce all over your fine linens, extracting a lump sum from the annuity can cause a excess fees for product holders. Since annuity providers already charge exorbitant fees to manage the payout on these products, lump sum withdrawals are not advised. Nutrition Facts Tax Status: Gains are Taxable, first in, last out Investments are made post tax, unlike traditional retirement accounts

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