Annuities are a type of retirement plan that will give you an income on a monthly, quarterly or annual basis through your lifetime. You will not amass a penalty on your federal tax even if you retire early since you would be taking your payments over time.
HOWEVER! Be advised that many insurance agents like to set annuities up because it provides them with the most commission of any product that they offer. Be aware of all fees associated with annuities including annual fees and maintenance fees. Be especially aware of the large surrender fees associated with annuities.
A better alternative would be an IRA that could be invested in mutual funds that you choose or could be chosen for you by a financial advisor. You would be able to set up systematic withdrawals from an IRA in a simalar way to an annuity.
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