The presence of this bequest motive results in an upward shift of the
annuitization frontier.
2002-62, the Service modified Notice 8925, Q&A-12, to allow taxpayers who chose a fixed
annuitization or a fixed amortization method to calculate their substantially equal periodic payments, to change to the required minimum distribution (RMD) method, without incurring a penalty.
This exception, which may be referred to as
annuitization of the plan, will be treated further when solutions to the problems of IRAs are discussed.
Partially offsetting these positive rating factors is the unfavorable pricing environment that resulted from the economic downturn in recent years; equity market volatility associated with minimum guarantees and
annuitization risk in ATLRE's reinsured products, particularly in a prolonged low interest rate environment; and the relatively modest scale of the company's life reinsurance operations.
He said product designers will also be thinking of new ways to make
annuitization available to the participants in 401(k) plans.
FIAs' flexibility extends to the
annuitization and 1035 exchange options, Klein added.
A lower total score favors
annuitization or pension while a high score favors non-
annuitization or taking the lump sum.
The choices range from making no changes to the current system to an outright requirement for
annuitization.
Critics of
annuitization might oppose this strategy by citing one of two common myths.
This article investigates the distributional consequences of mandatory
annuitization.
In addition, estimation results for consumption functions with respect to various kinds of wealth suggest that the
annuitization of wealth because of the maturing of public pensions and the introduction of reverse annuity mortgages is likely to further decrease the savings rate in the future.
A variable annuity will continue to have additional applications when new
annuitization features (or the surrender of capital accumulation in exchange for a cashflow stream) are appropriate for specific clients.
