In its simplest definition, an annuity is an amount payable annually. For our purposes, however, an annuity describes a contract offered by an insurance company that allows you to accumulate funds for retirement on a tax-deferred basis. Upon retirement, you’ll receive income from the annuity that can be guaranteed by the insurer to last either a fixed number of years, or as long as you live. An annuity is neither life insurance nor a health insurance policy, and it’s not a savings account or a bank Certificate of Deposit.