What type of annuity would Ann select to ensure her return matches the performance of the Standard and Poor's 500 index?

Selecting an equity indexed annuity is appropriate for someone like Ann, who wants her returns to reflect the performance of a specific stock market index, such as the S&P 500. Equity indexed annuities are designed to offer a combination of protection and potential for growth. They provide a fixed minimum interest rate, ensuring some level of security, while also tying the returns to the performance of a market index.

This means that if the S&P 500 performs well, Ann can see a higher return, potentially exceeding traditional fixed or variable options. However, the terms of equity indexed annuities often include caps on maximum returns and specific participation rates, which can limit how much she benefits from rises in the index.

The other types of annuities do not align with Ann's goal of matching an index performance. Fixed annuities offer stable but lower interest rates, while variable annuities allow for investment in various sub-accounts, which can fluctuate, but do not specifically guarantee a return linked to a market index. Immediate annuities provide guaranteed income payments right away, but they lack the investment growth potential tied to market performance that Ann desires.