If the annuity payout is to be on a variable basis, however, the amount annuitized (either a lump sum, in the case of an immediate variable annuity, or, in a deferred variable annuity, the current value of the accumulation unitsthe owner wishes to annuitize
) is not converted to a fixed income stream by applying an annuity payout factor.
A new rule of thumb seems in order for this time of financial stress for many retirees: 'Annuitize and invest the difference."
Myth 1: This says that people who annuitize (or take lifetime annuities) leave smaller estates.
(5) I found that a measure of annuity value, derived from a life-cycle model with mortality uncertainty, is significantly correlated with intentions to annuitize
assets in defined contribution plans.
Consumers and advisors generally have not wanted to annuitize
, Ferrer explains.
Using the example above, suppose a 65-year-old male annuitizes
his $500,000 annuity over his lifetime.
A dollar-for-dollar withdrawal provision allows clients to take their 5% or 6% annual increase for payments each year and then annuitize
their original investment after the 10-year waiting period.