What does a systematic withdrawal plan in annuities entail?

A systematic withdrawal plan in annuities involves permitting regular withdrawals of a specified amount from the annuity. This method allows the investor to access funds over time rather than taking a lump sum, which can help with budgeting and cash flow needs.

This approach gives the annuity holder flexibility to receive an income stream while still having the remaining balance grow or sustain over time within the annuity. It is particularly useful for retirees or those looking to supplement their income in a structured manner, as they can plan for regular expenses while still benefiting from the tax-deferred growth of the annuity.

The option concerning one-time withdrawals refers to a different strategy that does not involve regularity or scheduled payments. Similarly, the mention of requiring a waiting period or restricting withdrawals to financial hardship are conditions that don't align with the fundamental purpose and functionality of a systematic withdrawal plan. This allows the holder to have more control over their financial situation while maintaining the benefits associated with their annuity investment.