You have an investment where you make regular payments over a specified period. In return, you receive guaranteed monthly income payments for the rest of your life. This investment is particularly useful for ensuring a steady income stream during retirement. Which investment is it?
Answer
A
Certificate of deposit (CD): CDs offer fixed interest rates and maturity periods, but not lifelong income.
B
Mutual fund: Mutual fund returns vary based on market performance.
C
Bond: Bonds offer fixed interest payments and principal repayment at maturity.
D
Annuity: Annuities provide regular, guaranteed income payments for life.