A hybrid annuity is a retirement income investment that allows investors to split their savings between fixed and variable rate products.
They are designed to provide both growth and income by creating a portfolio of both conservative and riskier assets, however most annuities already offer these benefits.
Like other annuities, the goal is to create a stable income stream during retirement and can be paid immediately or deferred with fixed or flexible contributions.
A hybrid annuity consists of a variable component that allows investment capital to be allocated to a growth mutual fund sub-account and a fixed component that guarantees a set amount of payments after retirement.
Critics of hybrid annuities argue that they are overly complex, expensive, and over-designed, and that most annuities provide some kind of growth and income component.