An annuity is a financial contract typically made with an insurance company. It involves a promise to make a single lump-sum payment or a series of payments over time. In return, the insurance company agrees to make fixed payments to the annuitant at a future date. Annuities, often used for retirement savings, offer a blend of investment and contract elements, providing retirees with a steady income stream. Don't Miss: Average retirement income in America has been revealed – Will you make enough