Annuity Payout Options

Investing in an annuity means you also get to choose from the various Annuity Payout Options and how you want your eventual payouts to be calculated. This is primarily about what happens to the money after you die. Options include:

Period Certain Annuity

The Period Certain Annuity is referred to as Income for only a guaranteed period. It guarantees a specific payment amount for a set time-frame (like five years, 10, 20 or 30 years). If you should leave the planet before the end of the specified time-frame your beneficiary will receive what remains of the payments for the guaranteed time-frame.

Lifetime Payments

A guaranteed income payout for your lifetime only. It comes without any survivor benefit. These payouts can be fixed or variable. The amount of income paid to you is determined by the amount you invest and your life expectancy. Once your life’s ticket gets punched, all payments will stop.

Life with Period Certain

Life with Period Certain is sometimes called Income for life with a guaranteed period certain benefit. This is a combination of the life annuity and a period certain annuity. You receive a guaranteed payout for life with a period certain phase. If you die during the period certain phase of the account, your beneficiary will continue to receive the payment for the rest of that period. Example, life with a 15 year period certain. If you pass away ten years after you begin collecting. Then payments continue to your survivor for five more years to finish off the 15 years certain.

Joint and Survivor Annuity

This is a fairly common arrangement for married couples. Your beneficiary will continue to receive payouts for the rest of his or her life after you die.

In closing

You can play around with this Annuity Calculator and see the various annuity payout options.

If you decide that an annuity is the right move for you, there is a lot to decide when selecting the best from your Annuity Payout Options and the best annuity type. Do your research, read the fine print, ask a lot of questions, and go in being fully informed.


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