Which type of annuity is best suited for providing guaranteed income after a waiting period?

The type of annuity that is best suited for providing guaranteed income after a waiting period is the deferred annuity. This form of annuity is designed to allow the accumulation of funds over time, typically with a delay before any payouts begin.

During the accumulation phase, the invested money grows, either at a fixed interest rate or potentially through variable investments, depending on the specific structure of the annuity. Once the contract reaches the payout phase, which is the waiting period mentioned, the annuitant begins to receive regular disbursements, typically for a guaranteed period or for the remainder of their life.

Deferred annuities are particularly appealing to individuals who want to plan for retirement as they provide time for investment growth, ultimately leading to a more substantial income stream during retirement. This distinguishes them from immediate annuities, which start payments almost immediately after investment, life annuities, which focus more on lifetime income without a defined waiting period, and variable annuities, which offer investment flexibility but also differ in terms of guaranteed income structure.