life expectancy method

Definition

A category of annuity distribution methods that determine payments from life expectancy charts. Two examples of life expectancy methods are the term certain method and the recalculation method. There are IRS tables that determine life expectancy of the owner or the joint life expectancies of the owner and a beneficiary. The withdrawal amount is calculated by dividing the balance at the beginning of the year by the factor found in the IRS life expectancy tables. For each year that passes by, the life expectancy factor is reduced by one.

Cite this definition


Related Terms

amortization method, annuity factor method

Related Research Articles from the InvestorGuide.com University

401(K)
Learn the details about 401(k) retirement plans, including eligibility, contributions, investment options, fees and expenses, beneficiaries, and payment options at the time of retirement.

403(B)
403(b) plans are retirement plans for certain kinds of tax-exempt employers. Learn about eligibility, fees and expenses and transferability of these plans.

Types of Retirement Plans
There are almost too many retirement plans to keep track of. Here we explain them all. Government-sponsored plans, personal plans, annuities, employer-sponsored plans, qualified and non-qualified plans, defined-benefit and defined-contribution plans, pensions, 457 plans, and more.


Featured Sponsor


Give this definition a rating from 1 to 5 (5 being the best)...
1    2    3    4    5    



Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Add this Glossary to your Site | Bookmark InvestorWords.com
Home | Terms by Subject | Keyword Advertising | About Us | Contact Us
Work for InvestorWords.com
BusinessDictionary.com | InvestorGuide.com | WebFinanceInc.com
Disclaimer and Copyright©

Copyright©1997-2008 by WebFinance, Inc. All Rights Reserved.
Unauthorized duplication, in whole or in part, is strictly prohibited.