Annuitization
Financial term in the Retirement category
Definition
The process of converting an annuity or retirement account balance into a series of regular income payments, often for life. Once annuitized, the decision is typically irreversible. Payment amounts depend on account value, age, and chosen payout option.
Related Terms
Annuity
A financial product that provides a guaranteed income stream, typically used for retirement. You pay a lump sum or series of payments, and receive regular payments for a specified period or for life.
Retirement Income
Money received during retirement from various sources including Social Security, pensions, retirement account withdrawals, annuities, and investment income. Planning for multiple income streams helps ensure financial security throughout retirement.
Pension
A retirement plan funded by an employer that provides regular payments to employees after retirement. Increasingly rare in private sector, more common in government jobs.
Frequently Asked Questions
What is Annuitization?
The process of converting an annuity or retirement account balance into a series of regular income payments, often for life. Once annuitized, the decision is typically irreversible. Payment amounts depend on account value, age, and chosen payout option.
Why is Annuitization important in personal finance?
Annuitization is an important retirement concept that helps individuals make better financial decisions. Understanding Annuitization can improve your financial planning and help you achieve your money goals.
How does Annuitization relate to Annuity?
Annuitization and Annuity are related financial concepts. A financial product that provides a guaranteed income stream, typically used for retirement. You pay a lump sum or series of payments, and receive regular payments for a specified period or for life.
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