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 ?
In the United States, pensioners could significantly increase their income by reducing death benefits and embracing annuitization.
Purcal, 2009, Forced Savings and Annuitization With CrossSubsidies: A Mutation of the Beast, Working Paper, University of New South Wales.
In the distribution phase, there are four methods: Annuitization, Withdrawal Method, Withdrawal Method with a lifetime Income Protector, and the Time Segmented Method.
With this benefit, VA owners can withdraw specific amounts of money from the contract each year without affecting the guarantee of lifetime income payments through an annuitization that provides a fixed amount of income after a waiting period--even if their account balance dropped to zero.
Major issues addressed are increasing pension coverage, increasing annuitization in defined contribution plans, and adjusting pension policy to match increases in life expectancy.
Three safe-harbor methods are available for calculating the annual withdrawal amount: (1) the required minimum distribution method, (2) the fixed amortization method, and (3)the fixed annuitization method.
Moreover, annuity product innovation now allows for a guaranteed lifetime income stream without transferring the contract value to an insurer, as is done with traditional annuitization.
In contrast, private pension plans often allow or require annuitization of pension benefits.
Our patented approach to restructuring the funding of these assets creates very strong financial statement improvements compared to traditional annuitization," said Karin Landry, managing partner at Spring.
A lower total score favors annuitization or pension while a high score favors non-annuitization or taking the lump sum.
Establishing mandatory or voluntary individual investment accounts, and options for annuitization.
4) Guaranteed Minimum Income Benefits (GMIBs)--guarantee that the owner never receives less than a certain amount of income upon annuitization at a stated point in the future.