Buying annuities is a great way to plan for the future, and it has it's specific tax benefits.
Annuities are essentially a contract with an insurance company. You agree to make periodical payments, usually monthly, to the insurance company; these are agreed to be paid for a specific period of time. Once that time is up, the insurance company agrees to pay you periodically for a period of time - usually for the rest of your life or until you're 100 years old.
Be sure to assign someone as the beneficiary of the annuity, in case you pass away before the annuity is fully paid out.
There are two kinds of annuities: fixed annuities and variable annuities. The former tends to make less money, although it is more secure, and the latter tends to make more money, although it is less secure.
Fixed Annuities: This type of annuity is very clear and the money you'll get every month is guaranteed. The money the insurance company is holding for you can be invested by them however they feel is fit, and you will receive a monthly payment for a pre-determined amount, regardless of the stock market.
Variable Annuities: The money in this type of annuity can be invested at your discretion so that the money grows while it's sitting with the insurance company. You can invest it in stocks, mutual funds and more. The amount of your monthly payments will vary depending on how well your stocks and funds are doing.
Caution: Pay close attention to the specific details of the annuity. For example, there can be steep penalty fees if you withdraw the money earlier than allowed.