- The process of converting an annuity or retirement plan into income through either periodic income payments or a single lump-sum payment.
draw, receive payments, annuitize, capitalization, subsidization
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.