Annuities are savings vehicles for accumulating funds for retirement. There are various options for annuitants to shape their income at the time when they start receiving their annuity funds. Simply, you as an annuitant, can choose any settlement option that suits you the best but once chosen it cannot be changed. In this article you will find information about some of the most common annuity settlement options.

Annuitization is most popular annuity settlement option. Such option allows you to receive payments monthly, semi-annually, annually over a fixed time period. You can choose lifetime income option, period certain option or period certain plus life option under annuitization settlement option. In lifetime income option insurance company decides the monthly payment for life time on the basis of annuity value, your age and gender. In the mean time if you die, the remaining amount is kept by insurance company. Nothing will be given to your beneficiaries. This option is not much beneficial.

Second option i.e. period certain, lets you to take all your money with interest out over a period of 5, 10, 15, or 20 years. If you do not live to the end of the period, your beneficiary gets the remaining money in your annuity over the balance of the period. Period certain plus life is third option. Here the insurance company assures to pay you a check every month for a definite period of time, plus, if you live beyond that period you will receive monthly income that you cannot outlive.

Another option for annuity settlement is systematic withdrawals. Systematic withdrawals allow you to receive a fixed percentage of the account value. You also have the option to stop this arrangement at any time and get back your outstanding fund. BeFor choosing any settlement option some important factors such as your health, and spouse’s health, age, other sources of income and your tax bracket should be considered in order to get maximum benefit from annuity settlement.

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