Annuitization

Definition

• The process of converting an annuity or retirement plan into income through either periodic income payments or a single lump-sum payment.

Synonyms
subsidization, annuitize, draw, capitalization, receive payments

Related Terms and Acronyms

• Annuitant — Definition,
  • An individual who owns or is the recipient of an annuity.
• Annuitization Options — Definition,
  • The different income dispersal options available when annuitizing a retirement plan or annuity, such as the timeframe and list of beneficiaries.
• Annuity — Definition,
  • A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
  • A financial instrument that disperses a number of payments over a set period of time.
• Annuity Consideration — Definition,
  • The payment(s) made by an individual in order to accumulate value in an annuity.
• Life Expectancy Method — Definition,
  • A method of calculating the appropriate size of payments in an annuity's income phase by estimating the annuitant's life expectancy.
• Private Annuity — Definition,
  • An arrangement where one party agrees to transfer ownership of an asset to another party (usually a beneficiary) in exchange for lifetime payments.
• Reverse Mortgage — Definition, Important,
  • A loan that allows an older homeowner to convert built-up equity into cash. The loan comes due when the owner dies, sells the house or moves out.
• Single Premium Deferred Annuity (SPDA) — Acronym,
  • A deferred annuity funded with a single payment.