An annuity is a financial product that provides a series of regular payments over a specific period of time. It is commonly used for retirement planning or to generate a steady income stream. Annuities are often purchased from insurance companies, although they can also be offered by other financial institutions. The basic concept of an annuity revolves around making regular contributions or payments into the annuity account, which then grows over time through interest or investment returns. The accumulated funds are then distributed back to the annuitant in the form of periodic payments, typically on a monthly or annual basis. Annuities provide individuals with the opportunity to save for the future and ensure a stable income during retirement.
