An annuitant is a recipient of an annuity, which is a contract between a purchaser and an insurer in which the insurer makes payments to the purchaser in exchange for a one-time premium. An annuity is ideal for those who want to create a steady source of income that can last for decades following retirement.

An annuitant may receive payments from a deferred annuity or an immediate annuity. A deferred annuity is bought with a single premium and has an accumulation phase, where return on investment accumulates. At the end or a certain time in the accumulation phase, the buyer can choose to start taking income payouts. The income-generating period in a deferred annuity is known as the annuitization phase.

Immediate annuities are bought with two premiums—a single premium and a periodic premium. They start providing payouts right away, without an accumulation phase. Immediate annuities can be used as a substitute for traditional pensions, and they can provide guaranteed income for life.

When purchasing an annuity, the annuitant has to decide between a fixed-rate annuity and a variable-rate annuity. A fixed-rate annuity has a guaranteed rate of return that the annuitant will receive regardless of the stock market's performance. A variable-rate annuity is linked with investments, such as mutual funds and stocks, and the annuitant's payments will fluctuate in accordance with the market's performance.

The annuitant also has to decide between a lump-sum annuity and an installment-based annuity. A lump-sum annuity provides one lump sum at the beginning of the annuitization phase. An installment-based annuity pays out in the form of periodic payments. During the installment stage, the annuity is not available to be withdrawn in a lump sum.

The cost of an annuity is usually quite high. The annuity may also impose surrender charges and other restrictions on withdrawals. This can add to the annuity's cost; however, it can also help protect the annuitant from making impulsive withdrawals that could reduce the amount of income they receive over the long term.

Ultimately, an annuitant needs to thoroughly research the different types of annuities and decide which one best suits their financial needs. Annuities can provide a steady stream of income in retirement, but it's important to consider the associated costs and risks before investing.