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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 ?
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.
This provides an intuitive and simple way for planners and advisors to assist their clients by evaluating at any point in time whether it makes sense to continue to invest or to annuitize.
It also suggests that it may be worthwhile for a survivor to annuitize upon the death of a spouse.
Merrill found that it is optimal to annuitize a large portion of one's wealth at retirement - a larger portion than many financial advisors have previously suggested.
When the annuitant decides to annuitize the contract and selects a payout option, there are two basic steps, which are:
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.
Myth 1: This says that people who annuitize (or take lifetime annuities) leave smaller estates.
With Income Solutions(R), individuals can annuitize what they need, get a lower price, buy an income stream and leave their remaining savings in their employer's retirement plan.
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.
And, this new spousal benefit can provide a certain security that comes from knowing there is complete flexibility as to when to start taking income without ever having to annuitize the contract.