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Annuitization Method

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Annuitization Method
A way to receive distributions from an annuity where the annuitant is guaranteed to receive a certain amount in income each month for the remainder of his/her life. This carries lower risk than a systematic withdrawal plan, where the annuitant receives income until his/her account runs out. However, should the annuitant using the annuitization method die prematurely, payments may stop and the annuitant may lose the remainder of his/her annuity.


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15) Fixed Annuitization Method The fixed annuitization method also results in a level annual payment throughout the series.
Revenue ruling 2002-62 One-time change from the fixed amortization method or the fixed annuitization method to the required minimum distribution method (all of which are IRS sanctioned methods in notice 89-25); change made to avoid premature depletion of retirement account assets that have declined in value.
Using the life expectancy method would provide $378 per month (not enough), while using the annuitization method would provide $1,125 per month (too much).
 
 
 
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