What is the difference between an annuity fund and a pension fund?

What is the difference between an annuity fund and a pension fund Introduction: Navigating the World of Financial Planning Hello everyone, and welcome to our channel. Today, we're going to delve into the fascinating realm of financial planning. In particular, we'll be focusing on two investment vehicles that often come up in discussions: annuity funds and pension funds. While both offer avenues for long-term financial security, they differ in several crucial aspects. By the end of this video, you'll have a clear understanding of the distinctions between these two funds, enabling you to make well-informed decisions for your financial future. Defining Annuity Funds: A Closer Look Let's start by examining annuity funds. An annuity fund is essentially a contract between an individual and an insurance company. The individual, known as the annuitant, makes regular contributions to the fund, either in a lump sum or through periodic payments. Over time, these contributions accumulate, generating interest and growth. The key feature of an annuity fund is that it provides a guaranteed income stream during retirement. This income can be received as a series of payments or as a lump sum, depending on the annuity's terms. Annuity funds are often favored for their stability and predictability, making them an attractive option for those seeking a steady income in their golden years.