If you purchase an income annuity with money that you have already paid taxes on, part of each annuity payment will be considered a return of the amount you paid for the annuity (your purchase payment) and part will be taxable earnings.
Income annuities are specifically designed to provide guaranteed income that can last for life or for a specific period of time that you choose. With an additional source of guaranteed income, you may feel more confident about having the money you’ll need for the everyday expenses that don’t stop when your paycheck does.
With an income annuity, the contract owner decides (within contract limits) how often and when to receive income. Most important, income annuities can provide income that is guaranteed, no matter what happens in the financial markets.