Simple Definition:

An annuity is a fixed sum of money that is paid regularly (usually yearly) for a specific period of time or for the rest of someone’s life. Annuities are usually purchased from insurance companies or financial institutions, and they provide a steady income stream in retirement or as a form of investment. For example, if someone has a retirement annuity, they may receive $1,000 every month for the rest of their life.

Very Simple Definition:

An annuity is money that you get regularly, like every year, for a long time. It can be money you get when you retire or as an investment. For example, if you retire, you might get $1,000 every month for the rest of your life.