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To commence a series of payments from the capital that has accumulated in an annuity. The payments may be a fixed amount, for a fixed period of time, or for a lifetime.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


To convert a sum of money into a series of payments. For example, an investor may pay a sum of money in return for a lifetime series of monthly payments.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


When you annuitize, you choose to convert the assets in your deferred annuity or other retirement savings account into a stream of regular income payments that are guaranteed to last for your lifetime or the combined lifetimes of yourself and another person, called your joint annuitant.

You typically annuitize when you retire. But, if you own a nonqualified annuity, you may begin receiving income at 59 1/2 without risking an early withdrawal penalty, or you can postpone the decision to annuitize well beyond normal retirement age.

One reason people may give for choosing not to annuitize is that they're afraid if they die shortly after they begin receiving payments, they will forfeit a large portion of the annuity's value. To avoid that situation, some people choose to annuitize with what's called a period certain payout, guaranteeing that they or their beneficiaries will receive income for at least a minimum period, typically 5, 10, or 20 years.

You should be aware that the promise to pay lifetime income is contingent on the claims-paying ability of the company providing the annuity contract. That's why you'll want to check the ratings that independent analysts give your annuity company before you annuitize your contract.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
If annuitizing the fair market value of her inside investments at the time she decides to annuitize offers a higher yearly income, G can elect that option.
Furthermore, recommendations of financial advisors have a measurable impact on the decision to annuitize. (15)
It also suggests that it may be worthwhile for a survivor to annuitize upon the death of a spouse.
When the annuitant decides to annuitize the contract and selects a payout option, there are two basic steps, which are:
Participants do not have to decide how much to annuitize until their retirement, Moslander says, and most get help from TIAA-CREF staff in the six months before that.
One obstacle is that the decision to annuitize is often irrevocable; clients need flexibility as life circumstances change.
Simply defined, annuitize means "to convert a stun of money into a series of payments." When people annuitize, they give up their assets, which can be $100,000 and greater, to an insurance company in return for guaranteed income payments.The industry is "touting a feature they know 95 people out of 100 aren't going to use," said Voudrie, who's also the author of the syndicated column, Guarding Your Wealth.
Myth 1: This says that people who annuitize (or take lifetime annuities) leave smaller estates.
Specifically, they may want to recommend that retirement-bound clients annuitize their deferred annuities to provide a steady income stream to help cover mandatory expenses in retirement not met by pensions or Social Security payments.
The oft-documented and reported "Annuity Puzzle" which has come to be the preferred term in economic circles for why more of the population does not annuitize their income in near retirement when it would greatly benefit them to do so, has contributed to dismal sales of income annuities which in turn, has resulted in advisors not recommending the product.
If stocks tumbled from day one and never recovered, Daroff says, clients could still annuitize the initial $100,000 investment.
Protective also provides a 2% bonus to contract value when policyholders annuitize on or after the 10th contract anniversary, and it guarantees annuitants will receive--at no charge--at least an amount equal to their purchases if payments begin on the seventh contract anniversary.