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Author: TinyTone Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: What's an annuity? Date: 3/26/1998 8:01 PM
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This may seem like a foolish (small 'f') question but I have to ask it:

My company's 403(b) plan has the option of either mutual funds or annuities. I have a decent understanding of what a mutual fund is, but am struggling with the concept of an annuity.

I found a simple on-line definition which stated that an annuity is a fixed payment by an insurance company to an investor over a period of time. Wouldn't this be analogous to a stock or mutual fund dividend?

Also, the annuity has several "funds" which invest in stock, bonds, real estate, etc. similar to a mutual fund.

Is there some difference between an annuity and a mutual fund that I'm missing here?

Thanks.
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