Annuitize means to “flip the switch” and start taking income from an annuity.
What Happens When You Annuitize?When you annuitize, you tell the insurance company to start paying you.
When you make the choice to annuitize, you also decide how the payments should be structured. For example, you can choose a variety of options including:
- Lifetime payments
- Life with period certain
- Joint and last survivor
- Period certain
If you annuitize, the best option is the one that does whatever you need it to. For example, if you’re only taking care of yourself, the lifetime payment option might be a good choice. If there are other people counting on the income, you’ll want to look into the other options.
This is typically an irrevocable decision – once you annuitize, you can’t go back. This is because the insurance company has to take steps to guarantee you the annuitized payments.
Should You Annuitize?Remember that annuitizing is just an option. Most annuity holders never annuitize. Instead, people tend to use an annuity for a while and then take the money elsewhere. The main reason to actually annuitize is that you want the guaranteed payments.
Return to the Annuities Overview page.