N purchased an annuity that guarantees monthly payments starting at age 70; what type of annuity is this?

The correct answer refers to a fixed deferred annuity. This type of annuity allows the purchaser to accumulate funds on a tax-deferred basis until a specified future date, which in this case is when the payments begin at age 70. During the accumulation phase, the individual typically makes contributions, and the funds grow based on a fixed interest rate determined by the terms of the annuity.

A fixed deferred annuity specifically contrasts with a fixed immediate annuity, which would start making payments immediately after a lump sum investment. Since N's annuity begins payments only at age 70, it is clear that there is a period of accumulation before the distribution phase starts.

Flexible and variable annuities focus on investment options and fluctuations in value based on market performance, which does not apply in this situation where the focus is on guaranteed monthly payments that start later. Thus, the characteristics of the annuity purchased by N clearly align with those of a fixed deferred annuity.