What is a Joint Annuity?
A joint annuity is a financial product designed to provide income to two individuals, typically in a partnership or marriage, during their retirement years. This type of annuity ensures that both parties receive payments for a specified period or until the death of the last surviving annuitant.
Features of Joint Annuities
- Two Lives Covered: Payments continue as long as one of the annuitants is alive.
- Income Stability: Offers predictable income, enhancing financial security during retirement.
- Customizable Options: Various payment structures, such as lifetime payments or for a fixed term, can be chosen to meet individual needs.
Types of Joint Annuities
- Joint and Survivor Annuity: Ensures continuous payments until the last surviving annuitant passes away.
- Joint Life Annuity: Payments cease after the death of the first annuitant, providing less financial security for the survivor.
Benefits and Considerations
Joint annuities can be an excellent tool for couples looking to provide ongoing financial support to one another in retirement. However, it’s essential to consider factors such as fees, payout options, and the financial health of the annuity provider before committing.