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Annuity accounts are one of the most popular investment tools for seniors. Combining returns from the S&P 500 Market, a fixed rate of return, payments for life and no fear of outliving your retirement, it’s not wonder that more seniors are picking annuities.

But what makes an annuity good for a senior? Well, that depends on the needs of the senior. For someone who has other retirement accounts, a fixed rate annuity will pay monthly for life, earning a guaranteed rate for the life of the annuity. This might be a slower building retirement account than other annuities, it is the safest form of annuity for the senior who needs just a little more.

Equity annuities offer the senior a chance to attach their annuity account to the S&P 500 market. This allows the annuity to grow with the performance of the stock market. The downside of this type of annuity is that during a slowdown in the stock market, the account does not grow and can potentially lose earnings from the performance. The initial investment is still safe.

For seniors who want the security of a fixed rate annuity and the growth of an equity annuity, companies offer the index annuity. For an index annuity, the rate of return is higher during up years in the market, while down years still guarantee a payout. These grow faster than fixed rate annuities, yet offer the same lifetime payment from the annuity.

Whichever plan a senior chooses, all three will offer the investor the knowledge that the investment is protected from loss and the senior will never risk living longer than their retirement account annuity portfolio. The guarantee of income monthly helps seniors not rely on social security alone and provide them peace of mind when working on their financial freedom.