A fixed annuity is an insurance contract that pays the investor a fixed amount of money at regular intervals for a certain amount of time, such as 2 years or - more commonly -- until the investor dies. If you choose the lifetime annuity, your payments will end when you die, regardless of how much you have gotten back. If you choose to receive your payments over a set period and you die before that time is up, your remaining payments will go to your heirs. You can buy an annuity by making regular, periodic payments or with a lump-sum contribution. Your payments can begin immediately (called an immediate annuity) or at some point in the future (a deferred annuity). You might owe a 10 percent penalty if you withdraw money before age 59.5. A low-cost fixed annuity can be a good option if you expect to have a long lifespan and are afraid you might outlive your money. There are different types of fixed annuities and their terms and prices vary widely. For more information, see http://www.investopedia.com/articles/retirement/05/071205.asp.