What Are Deferred Annuities? 
A Deferred Annuity is a type of Retirement Savings method . At a very basic level , it credits your money a certain rate each year . This rate is often a set interest rate . But it can be based on Index-Linked gains , or equity gains/losses . Your money grows until you decide to do 1 of 2 things : 1 . You can move it to a different financial instrument . 2 . You can choose to annuitize the funds , creating a guaranteed income stream . Of course , you can choose to take periodic withdrawals from your deferred annuity as well . But be aware of any surrender charges or % based limits on your withdrawals . Most Deferred Annuities impose an early surrender charge on any withdrawal over 10 % . But some limit it to the earned interest , 5 % , and some even 20 % . 