Systematic Withdrawal Schedule
A method of withdrawing funds from an annuity account by which the annuitant withdraws funds from the account in specified amounts for a specified payment frequency. The annuitant is not guaranteed lifelong payments as he or she is with the standard annuitization method. With the systematic withdrawal schedule, the annuitant chooses instead to withdraw funds from his or her account until it is emptied, bearing the risk that the funds become depleted before he or she dies.
Investopedia Commentary
This method of fund withdrawal from an annuity, by not guaranteeing a lifelong income stream for the annuitant, places the risk of a longer-than-expected lifespan on the shoulders of the annuitant instead of on the insurance company offering the annuity. An annuitant choosing this withdrawal method instead of the annuitization method would not be limited to a small amount of funds every month, and could in fact remove his or her funds from the account relatively quickly, should he or she desire to do so.
Related Links
An Overview Of Annuities
Selecting The Payout On Your Annuity
Passing the Buck: The Hidden Costs of Annuities
See also: Accumulation Phase, Annuitant, Annuitization Method, Annuitization Phase, Annuity, Deferred Annuity, Fixed Annuity, Payout Phase, Period Certain, Variable Annuity