Income annuities are a way to receive money on a regular basis rather than in a lump sum. Many people who receive a cash settlement of some sort will invest those proceeds into an annuity and receive regular payments over a specified period of time. These investment vehicles are popular with retirees or those nearing retirement. The up-front income is invested in both fixed or variable instruments, or a combination thereof. With annuities that are backed by variable investment instruments, the payments can fluctuate based on the performance of the underlying investments. For this reason, many retirees do prefer to have a fixed annuity in order to have a regular payment that they can rely on. This risk aversion will protect the income that has been invested but there will be no upside potential for the annuity to pay more.