annuity
Americannoun
-
a specified income payable at stated intervals for a fixed or a contingent period, often for the recipient's life, in consideration of a stipulated premium paid either in prior installment payments or in a single payment.
-
the right to receive such an income, or the duty to make such a payment or payments.
noun
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a fixed sum payable at specified intervals, esp annually, over a period, such as the recipient's life, or in perpetuity, in return for a premium paid either in instalments or in a single payment
-
the right to receive or the duty to pay such a sum
Discover More
Many people's retirement funds are set up to be paid in annuities.
Other Word Forms
Etymology
Origin of annuity
First recorded in 1400–50; late Middle English, from Anglo-French annuité, annualté, from Medieval Latin annuitās, equivalent to Latin annu(us) “yearly,” derivative of annus “year” + -itās -ity
Explanation
An annuity is money that comes from an investment and is paid out regularly over a fixed period of time. You can buy an insurance policy that is an annuity, or you can choose an annuity as one of your retirement fund options. The noun annuity is from the Latin word annus, meaning "year." Indeed, annuities typically pay out on a year basis, although other terms are possible. If you win a large amount of money in the lottery, you can usually choose to take a lump-sum payment or smaller payments paid every year over some term, like 20 or 25 years. Figuring out which payment plan is best for you would be a nice problem to have!
Vocabulary lists containing annuity
This Week in Words: October 21- 27, 2018
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Personal Finance and Financial Literacy - High School
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Personal Finance and Financial Literacy - Middle School
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Example Sentences
Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.
Someone retiring today at the Social Security’s full retirement age of 67 and purchasing an annuity with a 3% annual increase would get an initial payout rate of around 6.2%.
From MarketWatch • May 21, 2026
Someone retiring today at the Social Security’s full retirement age of 67 and purchasing an annuity with a 3% annual increase would get an initial payout rate of around 6.2%.
From MarketWatch • May 21, 2026
Carvalho’s salary, unchanged since his initial contract, is $440,000 per year plus a $50,000 annual contribution to a retirement annuity, among other perks.
From Los Angeles Times • May 19, 2026
GRATs are typically set up for two to three years, during which the grantor—the person who sets up the trust—receives an annuity payment and is responsible for the paying the trust taxes.
From Barron's • May 16, 2026
But Benji politely nodded and listened and kept most of his attention on his dad, who smiled every time Mr. Rubin said annuity, or compound interest, or low-risk.
From "Millionaires for the Month" by Stacey McAnulty
Definitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023
Idioms from The American Heritage® Idioms Dictionary copyright © 2002, 2001, 1995 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.
