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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.


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.


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.


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.

References in periodicals archive ?
For those owners who never intend to annuitize, but instead are using annuities to minimize current taxable income with plans to eventually pass this wealth to the next generation, a tax trap awaits.
Starting in April 2015, plan members no longer will be required to annuitize and will have more flexibility in withdrawing funds from their pensions.
10% Percentage of people who annuitize after leaving their job after age 65.
They'll have to work longer, become more frugal and annuitize most of their savings.
At high levels of risk aversion, a household that does not annuitize will optimally plan to enjoy a fairly high level of consumption in advanced old age, regardless of the probability of attaining that age.
In this case, individuals could annuitize some percentage of their total savings upon retirement.
A good rule of thumb is to annuitize at least enough savings, so that, combined with Social Security, a retiree will have an income stream to meet his or her basic expenses in retirement--housing, utilities, taxes, food, and health care to the extent those costs are knowable.
Annuitize is a verb, meaning to exchange an investment for an income stream over a period of time, usually for life.
I will then discuss why I believe most pensioners need an annuity and when pensioners should annuitize.
The commitment to annuitize at a future date gives the company more time to match liabilities with assets at the appropriate durations, thus providing a higher yield than single-premium immediate annuities, which start paying right away.
We then put $200,000 into a deferred annuity that we will assume will earn 4% over its life and we will annuitize on a life-only basis at age 75.