What type of annuity postpones the commencement of payments until a specified period or age?

A deferred annuity is a financial product designed to delay the payment of income until a specified time in the future, which can be based on a certain age or a predetermined period. This structure allows individuals to accumulate funds over time, taking advantage of tax-deferred growth on the contributions made to the annuity.

In a deferred annuity, the premiums paid into the product are invested, and the account grows until the individual reaches their chosen point of payment commencement. This is particularly beneficial for retirement planning, as it allows for more significant accumulation of funds that can later provide a steady income stream during retirement years.

Immediate annuities, in contrast, begin payments shortly after the initial investment is made, making them unsuitable for those looking to postpone income. Variable and fixed annuities can be either immediate or deferred based on the terms of the contract, but the key characteristic of a deferred annuity is its provision to delay payments until a future date.