The reception of monthly payments from an annuity after an accumulation period. Depending on the type of annuity, one may annuitize payments for a period of time or for the remainder of one's life.


Annuitization means that you convert part or all of the money in a qualified retirement plan or nonqualified annuity contract into a stream of regular income payments, either for your lifetime or the lifetimes of you and your joint annuitant.

Once you choose to annuitize, the payment schedule and the amount is generally fixed and can't be altered.

If you have a qualified retirement plan, such as a 401(k), you generally have three major options when you retire. You can annuitize, roll over the account balance to an IRA, or take the money all at once as a lump sum distribution.

If you have a nonqualified deferred annuity, you have a choice of annuitizing, taking a lump sum, setting up a systematic withdrawal plan, or arranging some other payout method that the contract allows.

References in periodicals archive ?
Alcoa said it will phase annuitization in over time.
But voluntary annuitization is rare, which has been the focus of a great deal of study (for summary, see MacDonald et al.
Deferred Annuities: A type of long-term savings product that allows assets to grow tax-deferred until annuitization.
The insurer may provide guarantees of death proceeds or a certain annuitization amount (if purchased) within a variable annuity, thus providing clients with guarantees that otherwise would be unavailable to those clients who purchased the underlying investments directly.
But for nonqualified accounts, annuitization can offer an initial tax advantage over withdrawals because each annuitized payment will include a return of the annuitant's cost basis.
This annuitization process involves an irrevocable decision to accept a payment for the annuitant's life or a term of years, usually no fewer than five.
This restructuring of pension risk was achieved through a combination of a third-party annuitization and a self-insurance solution.
John Beshears, David Laibson, and Brigitte Madrian, Harvard University and NBER; James Choi, Yale University and NBER; and Stephen Zeldes, Columbia University and NBER, "What Makes Annuitization More Appealing?
Numerous rational motives have been suggested to explain the puzzlingly low demand for annuities, including bequest motives, uncertain healthcare expenses, high annuity prices (due in part to adverse selection, the tendency of those with longer expected lives to purchase annuities at higher rates), the existence of means-tested government benefits such as Medicaid, and the level of mandatory annuitization through Social Security and some DB plans.
Retirees who remain in the Verizon plan argue the company wrongly used plan assets to cover some of the expenses of the annuitization.
38 of deferred income annuities (DIAs) (products that delay the start date of annuitization by more than the 12-month time limitation imposed on single premium immediate annuities) provides a generally positive assessment of this recent entrant to the annuity marketplace.