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annuity definition - finance
A financial instrument that pays out the investorÂ’s earnings on a regular, periodic basis for a set amount of time. Annuities typically are used to provide funds for retirement. Annuities may be paid for the duration of a personÂ’s life or may be set for a certain period of time. Annuities are tax-deferred, so the earnings from investments in these accounts grow without tax liability until the benefits are paid out.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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