What's the difference between a single-life annuity and a joint-and-survivor annuity?

When you opt for a monthly annuity in retirement, you have two choices: to get payments that last for the life of just one person - you - or payments that last for the lives of both you and your spouse. Solo coverage is called a single-life annuity. If you want to make it a spousal affair, you'll choose a joint-and-survivor annuity. As the name conveys, the benefit is for both of you and will continue to be paid out to the survivor when one of you dies.

Not surprisingly, the monthly payout will be higher with a single-life annuity than if you opt for the joint-and-survivor benefit, because the expected payment period is longer. Contact the folks running the plan for your company, and they will churn out a report that shows you exactly what you will get under both scenarios. If you have limited retirement savings outside of your pension, the joint-and-survivor benefit generally makes the most sense to protect the surviving spouse.

Be careful what you choose: Typically, once you decide on one payment plan, you can't change it.

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