How Do Retirement Annuities Work? 
When you say retirement annuity , I guess you are referring to an annuity that pays an income monthly ? With that being said , the annuity that you are referring to is called an immediate annuity . Immediate annuities come in many variations of length of income streams . Typically an annuity to fund retirement would be a life only with survivor benefits . Basically this annuity will pay a monthly income for as long as a Annuitant is alive and then either 100 % or as low as 50 % to a survivor , normally a spouse for the rest of their life . There are many different types of annuities however . One annuity in particular is an Indexed annuity with an income rider . This would be an alternative to the immediate annuity . 