What Is an Annuity?
Wendy Swanson explains that an annuity is a contract with a financial institution, typically an insurance company, where you contribute money in exchange for income distributions either immediately or in the future.
Video Transcript
An annuity, in the simplest of terms, is a contract that you're going to take out with a financial institution, we think of insurance companies typically as that financial institution, you're going to give that company either a lump sum of money and then no additional moneys beyond that. Or you can do a series of contributions into this annuity. And typically, the reason you're purchasing this annuity is for some sort of income distribution at a certain stage in your life, whether it's immediately or sometime down the road.
