What Exactly Are Annuities? 
Your comment made me laugh ! And yes , I can answer your great question like a five year old , I 'm a master of simple ! An annuity is a way of putting money aside now to spend later . You get them through insurance companies . Once you put the money in it , you should n't touch it . It sits for many years growing and waiting for you . Once you get old and need it , you tell it you are ready to get paid . It will then start paying you every month until you a. -RRB- use it up b. -RRB- pass away or c. -RRB- your surviving spouse passes away -LRB- you pick one when you get it -RRB- . They are a way of making sure you have money during your retirement . They are not a good idea for everybody - -LRB- like riding a bike without training wheels for the first ever bike ride -RRB- some people have trouble with their bills , and setting aside lots of bill money could be a bad thing , so they have to do what is called a ` suitability study ' first . It will help figure out if it is a good thing . If the person you talk to does n't do one , they are bad - run away ! And some of them are filled with hiding fees and costs , that eat away like bad bugs at your money while it is away , so you have to be careful and ask ` pacifically what the costs are in total for the annuity . If it does n't cost too much , it is a good thing . There are lots of types , so ask about all of them and take notes before you even think of giving them your money , k ? I hope that helps , please realize that is greatly simplified . But the bottom line is that the right annuity can be a great part of your retirement plan . Please feel free to contact me for more details , or to answer any lingering questions , okay ? Thank you for the ` funnest ' question I have ever gotten to answer here ! 