group annuity

A group annuity is a type of annuity, which is a series of regular payments. Unlike individual annuities, group annuities base payments on the life expectancies of a group's members. Employers often sponsor these annuities, contributing to the cost, and employees accumulate credits for annuities that begin at age 65. The final pension is the sum of these individual annuities. A key advantage is that annuities can provide a larger lifetime income than simple interest investments.

There are also variable annuities, where payments fluctuate with stock market performance, and some plans are tied to cost-of-living indexes. These aim to protect annuitants from inflation. Annuities can be complex financial products with fees, and their terms should be carefully understood.123