Final answer:
An annuity is a financial product that provides a lifetime income stream and plays a vital role in retirement planning.
Explanation:
An annuity is a financial product that offers its owner a lifetime income stream. It is a contract with an insurance company or financial institution that provides regular payments for a specified period or until the owner's death.
Annuities are considered safer investments compared to stocks and bonds because they offer fixed payouts, but they may result in lower overall income due to lower risk levels. Annuities play a crucial role in retirement planning by ensuring a steady income stream in old age.
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