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The equivalent annual annuity approach is one of two strategies used in capital budgeting to compare jointly extraordinary projects with unequal lives.
The EAA method calculates the consistent annual cash waft generated via a venture over its lifespan if it was an annuity.
Is an annuity better than a pension?
In general, an annuity will give you the most control over your money. If you take a lump-sum pension payment, you have the ability to use the cash then again you choose.
What is the downside of an annuity?
The fundamental drawbacks are the long-term contract, loss of control over your investment, low or no activity earned, and high fees. There are additionally fewer liquidity choices with annuities, and you have to wait until age 59.5 to withdraw any cash from the annuity besides penalty.
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