An annuity is considered to be a contract between you and an insurance company of your choosing. You may make a lump sum payment or a series of payments and in return you can obtain regular, systematic payments either starting right away or sometime in the future. An annuity is intended to produce regular monthly income during your retirement years. An annuity is a flexible financial vehicle that can be tailored to your specific financial needs. An annuity is usually a popular choice for safe money investors who want to have a steady and reliable stream of income during their retirement years. An annuity payment can be disbursed in monthly, quarterly, annually or even in a lump sum payment. An annuity payment is determined by a variety of factors, which will usually include the length of your payment period, as well as the interest rate being paid out to you.