A steady stream of payments. It’s anything that pays you something at regular intervals, whether monthly, yearly, etc. An annuity can be a “life annuity,” which is like an alternative retirement program for yourself. Or, you buy an annuity as an investment, like you would buy stocks or bonds. Either way, annuity plans (there are millions) work like this: you put money in, you can let it grow tax deferred (so you pay tax only when you get the payments) then get a series of checks back. (See also: Variable Annuity)

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