A deferred annuity is a type of insurance product that allows you to invest in it and receive payments at a later date. It's essentially an agreement between you (the investor) and an insurance company, wherein you make regular contributions into the annuity over a specified period, and then the insurer pays out a stream of income to you at some point in the future - typically during your retirement years.
The main advantage of deferred annuities is that they allow you to accumulate funds on a tax-deferred basis, meaning that you don't have to pay taxes on the growth of your investment until you start receiving distributions from it. This can help your savings grow faster over time since more of your earnings stay invested and compound.
Additionally, deferred annuities often offer some form of downside protection - meaning that even if the market performs poorly, your principal is guaranteed to be returned to you (subject to certain fees and charges). This can provide a level of security for your retirement savings, especially in times of economic uncertainty.
Overall, deferred annuities are a useful tool for long-term saving and income planning during retirement, but it's important to carefully consider the features, costs, and risks associated with these products before investing.