Single vs Joint Annuity
What’s the difference?
What is a single person annuity?
A single annuity pays a fixed regular income from the fund until death of the annuitant. Once the retiree has passed on, no more money is paid out dependants and or partners. If you don’t have a husband, wife, partner or any other dependent relying on you for financial support after your death. There are some exceptions to this such as annuities that include a guaranteed period; in this scenario dependants will receive an income until the guarantee term ends.
A single life annuity pays a higher level of income than a joint life annuity.
The not so good
There is no provision for income after death relating to your spouse or dependant.
What is a joint life annuity?
The question to be asked is if your partner has no income of their own, or perhaps only a residual amount. If this is the case then you need to consider how they will afford to live after you pass on. With a joint life annuity, financial dependants will receive payments after you die – with some annuity packages the income can be for the remainder of their lives.
You have to decide whether you want the income paid out to remain at 100%, 75% or 50% of its value. A joint life annuity with reduced payments after death means that your income will be higher when you are still alive. Choosing a plan with no reduction of income paid to your partner or dependants will force you to receive a lower income from the annuity.
Joint life annuities will pay your spouse/dependant an income after your death.
The not so good
Be prepared to receive a lower income than you would under a single life annuity.
Want more information?
Retirement options should never be decided on a whim, they deserve careful consideration. We believe that all our customers should receive the same service and options that we ourselves want in our retirement. If you’re unsure about what is right for you, or you simply want further information to help you make the right decision please talk to us.