Is It Time To Annuitize?

What does it mean to annuitize? The term refers to the contract holder taking action to begin receiving annuity payments. Once you annuitize or begin receiving your payments, you can't go back, so be sure that you are ready to take that step. When you annuitize, you have options as to how you will receive your income payments.

• Lifetime: You will receive income payments for the rest of your life.
• Lifetime Income with Period Certain: You can receive payments for your entire life, but if you die before the period certain or guarantee period, your beneficiaries will receive payments until the end of the period certain. If you outlive this period, once you die, payments stop completely and no income is distributed to your heirs.
• Period Certain: Payments are guaranteed for a specific time period whether you die before the period ends or not. If you die early, you can name a beneficiary to receive remaining income left on the annuity term.
• Joint Survivor: Annuity payments are distributed to one owner of the contract until the end of that person's life. The joint or second person named on the annuity will receive continuing payments from the same annuity until the end of their life.

Sources

1. Annuitization: Does your retirement plan provide income for life? Retrieved May 27, 2008, from http://www.massmutual.com/mmfg/products/insure/annuity/article_annuitizationfaq.html#3