An annuity is a financial product that provides a series of payments made at regular intervals. People often purchase annuities to save for retirement or to ensure a steady income stream later in life. They can be funded with a lump sum or through regular contributions, and the payments can begin immediately or at a future date. 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 Annuities can also have tax advantages, as the earnings grow tax-deferred until withdrawn.