A series of equal payments that are made at equal intervals to the owner of the annuity in exchange for the ownerÂ’s investment of a fixed amount of cash. Annuities typically are used as an investment tool to plan for retirement. In contrast, the returns of variable annuities change depending on the direction of the market. Returns from equity-indexed annuities are linked to the performance of a specific equity index, such as the S&P 500.