noun

annuity

/əˈnjuːɪti/ · say it: uh·NOO·uh·tee

a fixed sum paid to someone each year, typically for life

In Banking & Finance

In more detail

1. (noun) a fixed sum of money paid to someone each year, usually for the rest of their life

2. (noun) a financial product that you buy from an insurance company, which pays you money regularly

Examples

1. She receives an annuity of $5,000 per month in retirement.
2. He invested in an annuity to ensure steady income after he stops working.

How to use annuity

Annuity is a formal financial and legal term used primarily in discussions of retirement planning, insurance products, and personal finance. It refers specifically to a structured arrangement of regular payments, distinct from a general pension which may have broader connotations. The term appears in both personal investment contexts and institutional financial advice.

Common phrases

purchase an annuity
annuity payments
fixed annuity
variable annuity
annuity income

Synonyms

pension · stipend · allowance · income stream

Word family

annuitant (noun: recipient of an annuity)

A common mistake

Learners sometimes confuse annuity with annuals or fail to recognize that an annuity typically provides lifetime payments, not just payments for a limited period, though some annuities do have defined terms.

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