3.9.2.6. Receiving Payment
At a certain point, the investor will decide to end the accumulation phase and move into the payout phase. During the payout phase, the investor can choose to receive payment in one of the following ways:
- • Random withdrawal—the annuitant requests sums at random times
- • Lump sum
- • Monthly payments (annuitize the contract)
Note that not all annuity contracts allow random withdrawals during the payout phase.
When an investor withdraws money from his annuity, the mode of taxation will depend on the type of withdrawal