The process by which you convert part or all of the money in a qualified retirement plan or non-qualified annuity contract into a stream of regular income payments, either for your lifetime or the lifetimes of you and your joint annuitant.
Once you choose to annuitize, the payment schedule and the amount is generally fixed and can’t be altered.
A qualified retirement plan allows three options when you retire: annuitization, rolling your account balance over into an IRA, or taking your money out all at once as a lump-sum distribution.
With a non-qualified annuity, on the other hand, your choices include annuitizing, taking that lump-sum payment, setting up a systematic withdrawal plan, or making other arrangements as specified by your contract.