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What is an annuity?

What is an annuity? Here are some definitions.

Noun
  1. A right to receive amounts of money regularly over a certain fixed period, in perpetuity, or, especially, over the remaining life or lives of one or more beneficiaries.
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The name annuity dates back to Roman legionnaires who were paid an annual pension when they retired from the army.
Hideo succeeded and was awarded the decoration and an annuity for carrying out his duty so well.
Several institutional investors are also still buying into the sector and see property as a safer bet to match long-term annuity liabilities.
The value is subject to the normal income tax on the money drawn down from the fund or annuity.
Using a forecast of future cash flow, you can treat it like an annuity and discount it to present value.
You can still take the traditional route and, having drawn down your 25 per cent tax free lump sum, simply invest in an annuity.

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