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If you have a 401k could you trade it for a monthly check for life instead?

The year is ending, meaning resolutions are being created for the new year.

Many people choose to manage their money differently as a resolution.

One way you could change the course of your financial life is by trading in your 401k for a monthly check.

This is a life long monthly check through annuities.

Related: Some states choose to automatically enroll residents in IRA accounts

A lot of people rely solely on Social Security benefits to get by during retirement. That is often not enough.

Annuities offer an option to give you money during retirement and guarantee that you will not outlive that income.

What are annuities and how do they work?

Annuities can be set to offer long term income for a certain amount of time.  They may also offer income for the duration of a person’s life.

These are contracts between the person who purchases them and the insurance company.

They may be bought with one lump sum or a series of payments.

Related: Make this move and you can boost your Social Security payments

They can begin payments immediately or the payments may be deferred.

Types of annuities include

  • Guaranteed Fixed Income Annuities
  • Growth Potential Fixed Income Annuities
  • Flexible Income Variable Annuities

Through accumulation and annuitization, a person can be provided with a stream of income they will not outlive after their lump sum payment is converted.

First is the accumulation phase.

Related: Online statements for Social Security benefits are redesigned

This lets your investment grow from 10-30 years depending on your contract, tax deferred.

After that is the annuitization process where you get monthly payments.

Immediate annuity does not have an accumulation phase.

You won’t lose money in an immediate annuity, but you can in a variable or index linked annuity.

You can get annuities through MetLife, Lincoln Financial Group, John Hancock, Nationwide, and New York Life.

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