RETIREMENT ANNUITIES - Annuitant The person who is covered by an annuity and who will usually receive the benefits from the annuity.

Annuity An investment that provides an income at regular intervals for a specific period of time. The income investors earn from annuities is free from taxation until the investor starts to access the funds.

Annuity (With Period) Certain An annuity that pays out regular sums throughout the life of the insured, but also guarantees to pay income for a specific number of years regardless of whether the insured lives or dies. If the insured dies before the period has lapsed income payments are made to the estate or a nominated beneficiary.

Beneficiary The person guaranteed to receive an annuity payment.

Deferred Annuity Income payments only start at some time in the future. The payments begin after a specified number of years or at a specified age.

Escalating Annuity An annuity that allows an investor to specify a fixed percentage annual increase in his or her income payments.

Joint and Survivorship Annuity Usually two annuitants, generally a married couple, take out the policy. The annuity pays out income until the death of the surviving annuitant. A joint annuity can be structured to suit different needs. The annuitants can choose to have the income payment reduced on either the first death, or either of the two deaths.

Life or Living Annuity An annuity that leaves any capital that has not been spent for the investor's estate. The investor can also decide where the underlying capital should be invested, such as in unit trusts. The policyholder lives off a certain self-defined percentage of the capital every year.

Phased retirement Buying annuities with small portions of a personal pension, rather than buying one annuity with the entire pension fund.

Retirement Annuity A retirement saving tool which pays out regular sums to the investor as a pension after retirement.

Single Life Annuity An annuity that pays out a guaranteed amount for a fixed term to the retiree or, if he/she dies in this time, to a beneficiary. If the annuitant is still alive after the fixed term, regular payments will be made for the rest of his/her life.

Variable annuity An annuity policy that according to which the amount of each periodic payment differs according to the performance of the underlying investments, usually unit trusts, as opposed to a fixed annuity, which pays out a fixed amount for the duration of the contract.