An annuity is a financial product that provides a series of payments made at regular intervals. It is often used as a way to save for retirement, allowing individuals to invest a lump sum of money that can grow over time. Once the investment matures, the annuity pays out a steady income, which can be beneficial for managing expenses during retirement. There are different types of annuities, including fixed annuities, which offer guaranteed payments, and variable annuities, where payments can fluctuate based on investment performance. Annuities can be purchased from insurance companies and may come with various fees and terms.