Defined terms for the annuity market and lifetime income landscape.
Systematic drawdown is a self-directed retirement income strategy in which an individual withdraws income from an investment portfolio according to a specified rule — typically a fixed real dollar amount or a fixed percentage of the current balance — over a planning horizon.
Systematic withdrawal is a distribution mechanic in which the contract owner receives scheduled periodic payments from an annuity's account value — or, more broadly, from any retirement savings vehicle — without annuitizing, with the account retaining its balance and liquidity between payments.
Systematic withdrawal versus annuitization is the structural comparison between drawing income from accumulated savings at a self-selected rate while retaining capital access, and converting that capital into a contractual stream of lifetime payments in exchange for surrendering the access.
Systematic longevity risk is the population-level risk that the mortality assumptions underlying a lifetime income arrangement prove wrong because the entire reference population lives longer — or, less commonly, shorter — than was assumed.
