As the first wave of "Baby Boomers" approaches and enters retirement, society is experiencing the crest of what many are referring to as an impending "Silver Tsunami". This unprecedented volume of folks over the age of 65 is also entering retirement at a time of relative financial uncertainty. Many of these new or soon to be retirees, are seeing the value of adding annuities to their plan for a secure retirement. There are various types of annuities, and they can be complex. But the attraction of the annuity is that it provides a steady and measurable stream of income. In these uncertain times, where people are not quite sure if they have built a big enough nest egg, that level of security is drawing more seniors, or soon to be seniors to annuities.

If you are retiring and are receiving a pension, you are faced with a bit of a dilemma. With any pension you are entitled to do whatever you want with one-third of the money, the remaining two-thirds however, needs to be put in a compulsory annuity. You have two choices there - a life annuity or a living annuity. A life annuity is the more traditional of the two. It is also sometimes referred to as a fixed annuity. With a life annuity you give a lump sum of money to a financial institution, usually a life assurer, and in return you receive a set amount in monthly payments for the rest of your life. The amount of the monthly payment is determined by several factors: the amount invested, your life-expectancy, the annuity variations you select, and the actual prevailing interest rates on the day you purchase the life annuity.