TL;DR
The three main annuity payout options are: life-only (highest payment, stops at death), period certain (guaranteed for 5-20 years even if you die early), and joint survivor (continues to spouse at 50-100% after your death). Life-only pays the most but has no guarantee; joint survivor protects your spouse but reduces payments 15-30%. Compare after-tax income using the calculator.
Core payout options explained
Life-Only (Straight Life)
- Highest monthly payout because payments stop when you die
- No survivor benefit
- Best for: Single retirees or those with separate spousal protection
Life with Period Certain
- Guaranteed payments for your lifetime plus a minimum period (typically 5-20 years)
- If you die during the certain period, beneficiary receives remaining payments
- Trades slightly lower monthly payment for guaranteed minimum total payout
Joint and Survivor
- Income continues for spouse after your death
- Typically 50%, 66%, or 100% of original payment to survivor
- Significantly reduces initial payout compared to life-only
- Break-even analysis essential for decision-making
Life Refund
- Pays you for life; if you die before receiving total premiums, difference paid to beneficiary
- Lower monthly payment than life-only
- Provides estate protection
Decision framework
- List household income needs separately for each spouse
- Compare quotes across multiple option types from same carrier
- Calculate break-even age for joint vs life-only options
- Apply after-tax analysis using marginal tax rates
- Stress-test longevity scenarios using the calculator
What most people miss
Joint survivor options often reduce payouts by 15-30% compared to life-only. For couples with one spouse already receiving a pension or Social Security covering essential expenses, life-only with separate life insurance may provide more total lifetime income.
Internal next steps
- Compare options using the Annuity Simulator
- Analyze Life-Only vs Joint Break-Even
- Review Period Certain Guide
FAQ
Can I change my payout option later?
Generally no. Payout options are irreversible once annuitization begins. Choose carefully.
What happens if I choose life-only and die early?
Your remaining premium balance stays with the insurance company. This is the trade-off for higher monthly payments.
Is joint survivor worth the reduction?
It depends on your spouse’s other income sources, age difference, and health. Calculate the combined household income need before deciding.