Before you choose to buy annuity, there are several questions you’ll have to ask yourself. Buying annuity can be confusing, and not all annuities fit all lifestyles and financial needs.

First, what type of annuity are you buying? An immediate annuity allows you to trade a lump sum of money for an immediate stream of cash. With a deferred annuity, you buy annuity from an insurance company, which allows it to gain interest and then pay you a steady stream of payments at some later agreed to date. A fixed annuity gives you a guaranteed return on your product. A variable annuity, however, allows you to place the annuity in stocks and other products, which can enable you to earn a higher return than you’d get through a fixed annuity.

The next question is how will the annuity benefit you? If the annuity offers death benefits, it will provide your descendants the amount you contributed after you die. With living benefits, however, there’s a guaranteed minimal amount of return, which helps ensure financial security.  The annuity will also be tax deferred, so no product will be taxed until you decide to withdraw it.

Ask what the annuity seller will make from the sale. Paying a commission is perfectly natural, but it should be disclosed up front. In some ways, it’s simply a charge for a service, but it is worth considering what’s in it for them as you weigh their arguments on how to plan for your future. It might be worth contacting a fee-only financial advisor who doesn’t have an incentive to try to sell you something.

Whatever you decide, you need to remember that your income needs to last. It’s simply not safe anymore to rely on the stock market, which can come crashing down at any minute. As health and medicine advances, more and more people are living longer, so it may be difficult to plan a retirement for your entire life. The last thing you want to worry about is outliving your money. Fortunately, many annuities guarantee a steady stream of payments throughout your life, saving you the worry. You might as well live long and enjoy it.

Whatever your reasons, weigh all the options and consider the alternatives. Your future is as unique as your past, requiring individual specifications that meet your lifestyle needs. Purchase annuity that suits you.

It’s your retirement. Live it well.