An annuity is a financial product that provides a stream of income over a set period. Annuities are often used in retirement planning as a way to generate income from a lump sum investment.

An annuity is an insurance contract you purchase to receive payments for a specific period, such as 30 years, or for the rest of your life. By applying a mathematical formula consisting of variables ...

is—it’s effectively a percentage of an amount over a year. If your savings account earns you a 0.05% interest per year (which is a REALLY terrible interest rate, honestly), you earn $5 in interest for ...