What Happens to an Annuity at Maturity? 5 Options

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: When your annuity matures, you can renew it, annuitize, roll to a new annuity, cash out, or do a 1035 exchange. Here is what each option means for your taxes and income. Related Articles What Is An Annuity | Annuity Guide Should You Buy An Annuity At Age 60 Annuity Options Explained | Annuity Guide Independent Annuity Advice | Annuity Guide Key Takeaways At maturity, you can choose to renew your annuity for continued tax-deferred growth. Annuitizing converts your annuity into a stream of income, providing financial stability. Rolling over to a new annuity can offer better rates or features for your needs. Cashing out may incur taxes and penalties, impacting your overall retirement savings. Use retirement calculators to assess your options and plan effectively. Quick Answer When your annuity reaches maturity, you have several options: renew the contract, annuitize for regular income, roll over to a new annuity, cash out, or perform a 1035 exchange. Each choice has unique implications for your financial strategy. SafeMoney Editorial Team  |  Reviewed by Licensed Financial Professionals  |  Updated Regularly Understanding Annuity Maturity Annuities are popular financial products designed to provide guaranteed income and protect assets. When an annuity reaches maturity, it marks the end of the contract term. This is a pivotal moment where annuity owners must decide the next steps for their investment. The maturity period can vary significantly, ranging from a few years to over a decade, depending on the type of annuity and its specific terms. Your Options at Annuity Maturity Upon reaching maturity, annuity holders have several options to consider. Each choice can impact your financial goals and tax situation, so it's crucial to understand the implications of each. Renew Your Annuity Renewing your annuity allows you to extend the contract, potentially securing new terms or interest rates. This option can be beneficial if you want to continue growing your investment with the same provider. Annuitize Your Contract Annuitizing converts your annuity into a stream of regular income payments. This option provides financial stability, as it can offer a steady income for a set period or even for life. However, once you annuitize, the decision is typically irrev