Christian Simmons, writer and researcher for RetireGuide
  • Written by
    Christian Simmons

    Christian Simmons

    Financial Writer

    Christian Simmons is a writer for RetireGuide and a member of the Association for Financial Counseling & Planning Education (AFCPE®). He covers Medicare and important retirement topics. Christian is a former winner of a Florida Society of News Editors journalism contest and has written professionally since 2016.

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  • Edited By
    Lee Williams
    Lee Williams, senior editor for

    Lee Williams

    Senior Financial Editor

    Lee Williams is a professional writer, editor and content strategist with 10 years of professional experience working for global and nationally recognized brands. He has contributed to Forbes, The Huffington Post, SUCCESS Magazine,, Electric Literature and The Wall Street Journal. His career also includes ghostwriting for Fortune 500 CEOs and published authors.

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  • Financially Reviewed By
    Ebony J. Howard, CPA
    Ebony J. Howard, CPA

    Ebony J. Howard, CPA

    Credentialed Tax Expert at Intuit

    Ebony J. Howard is a certified public accountant and freelance consultant with a background in accounting, personal finance, and income tax planning and preparation.  She specializes in analyzing financial information in the health care, banking and real estate sectors.

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  • Published: July 22, 2021
  • Updated: October 25, 2023
  • 3 min read time
  • This page features 2 Cited Research Articles
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A qualified expert reviewed the content on this page to ensure it is factually accurate, meets current industry standards and helps readers achieve a better understanding of retirement topics.

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How to Cite's Article

APA Simmons, C. (2023, October 25). Annuitization. Retrieved May 20, 2024, from

MLA Simmons, Christian. "Annuitization.", 25 Oct 2023,

Chicago Simmons, Christian. "Annuitization." Last modified October 25, 2023.

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Key Principles

RetireGuide’s mission is to provide seniors with resources that will help them reach important financial decisions that affect their retirement. Our goal is to arm our readers with knowledge that will lead to a healthy and financially sound retirement.

We’re dedicated to providing thoroughly researched annuity information that guides you toward making the best possible financial decisions for you and your family.

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What Is Annuitization?

Annuitization is a method of guaranteeing yourself a regular and set income over a specific period of time. When you annuitize, you are essentially turning your annuity into set payments that you will receive — ensuring that you will never run out of money or not have income coming in.

If you choose to go this route, you have reached the point where you want to start receiving money instead of accumulating or putting money into an annuity.

Annuitization can be useful as a part of retirement planning since you can receive these payments when you are out of the workforce and have no other reliable or consistent source of income.

How Does Annuitization Work?

If you annuitize your annuity and convert it into set payments, it is important to remember that only the annuitant can receive them. Regardless of the original value of the annuity, the stream of payments will continue to the annuitant until their death.

You can also structure the payments you’ll receive in different ways during the annuitization process. For example, period certain annuitization allows you to opt for payments across a different timespan instead of them lasting until death.

If the annuitant dies before the period ends, then the payments will go to a beneficiary. Alternatively, if the set period ends and the annuitant is still alive, the payments continue.

The period certain option offers protection against the possibility of the annuitant dying not long after the annuity was annuitized, costing you or your family the majority of your money.

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When To Annuitize an Annuity

One of the main reasons to annuitize an annuity would be the guarantee yourself a set amount of income over a period of time, or even the rest of your life.

Annuitization ensures that, regardless of financial situations are hardships, you will always be guaranteed to have at least some money coming in each month.

Annuitization is often a permanent process, so it’s a big decision that you should make only when you have considered your present and future needs.

Once you have annuitized, you can’t go back and decide to withdraw the money that you put into the annuity. You will only receive it as payments over a set amount of time.

When you annuitize, it may differ depending on the type of annuity. According to the National Association of Insurance Commissioners, annuities can be either immediate or deferred. An immediate annuity would be annuitized right away where a deferred annuity could be years later.

Also, without period certain, leftover money from your annuity will not go to the annuitant’s family when they die. Even with period certain, the payments only continue for the predetermined amount of time regardless of how much money was left over.

Annuitization does ensure that, regardless of financial situations or hardships, you will always be guaranteed to have some money coming in each month.


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Last Modified: October 25, 2023

2 Cited Research Articles

  1. National Association of Insurance Commissioners. (2021, August 25) Annuities. Retrieved from
  2. Colorado Department of Regulatory Agencies. (n.d.). Annuities. Retrieved from