Annuity/əˈnuːəti/ Definition 1 of 2Pro Tip 1/3Constant Income An annuity ensures a person receives a steady income, often after retirement. Her annuity provides her a certain amount each month like clockwork. Pro Tip 2/3Lifetime Payments Annuites are often associated with life-long financial security. Grandfather's annuity guarantees him money for the rest of his life. Pro Tip 3/3Financial Planning An annuity is a tool for managing long-term finances, especially for old age. He bought an annuity to secure his financial future after retirement.