annuity

Definitions

Economics

  • noun an amount of money paid each year to a retired person, usually in return for a lump sum payment. The value of the annuity depends on how long the person lives, as it usually cannot be passed on to another person. Annuities are fixed payments, and lose their value with inflation, whereas a pension can be index-linked. When people retire, they are required by law to purchase a compulsory purchase annuity with the funds accumulated in their pension fund. This gives them a taxable income for the rest of their life, but usually it is a fixed income which does not change with inflation.

Health Economics

  • (written as Annuity)
    A constant amount of money per year received in perpetuity or for a specified period of time. The coupon on a bond is a specific type of annuity.

Law

  • noun money paid each year to a person, usually as the result of an investment

Real Estate

  • noun an amount of money paid to someone yearly or at some other regular interval
  • noun an investment that pays the investor a fixed amount of money each year for a number of years, often the investor’s lifetime
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