What Do Annuities Do? 
Annuities were developed centuries ago to ultimately provide income . For example many savers purchase annuities because the fixed rate is generally higher than most banks and money market funds , but their end game goal should be income . Keep in mind that annuities are tax deferred , so you only pay taxes when you take distributions from an annuity . Deferring taxation on a long term annuity can provide an extra boast to your income stream later on when you annuitize . 